Modern  Bookkeeping 
Accounting 

and 

Business  Practice 


A   Book   Containing  a   Thorough  and   Practical   Course  in  Modern 

Methods   of   Bookkeeping   and   Accounting,  Illustrating   the 

Best    Business    Practice.     Prepared    for    the    Use  of 

Students    Attending    Business     Colleges,  High 

Schools,  Normal  Schools,  Academies,  and 

the  Higher  Grades  of  Public  and 

Private  Schools. 


BY 

S.   IRVING  STRAYER 

AND 

H.  WINFIELD  WRIGHT,  LL.B.,  C.P.A. 

Member  of  Pennsylvania  Institute  of  Certified  Public  Accountants,  The  American 

Institute  of  Accountants,  and  American  Association  of  University 

Instructors  in  Accounting. 


PUBLISHED  BY 

THE  MODERN  TEXT  BOOK  COMPANY 

PHILADELPHIA 

1918 


-5 


£ 


COPYBIGHT  1918 
BY 

S.  Irving  Strayer 


MA/N  LIBRARY 


A/kJ/Ll 


Modern  Bookkeeping,  Accounting  and 
Business  Practice. 

This  book  contains  a  carefully  graded  series  of  lessons  in  Bookkeeping,  Accounting  and  Busi- 
ness Practice.  The  lessons  aie  made  so  plain  and  are  illustrated  so  fully  that  even  a  child  can 
understand  them.  Any  person  of  average  intelligence,  without  any  previous  knowledge  of  Book- 
keeping can  become  a  fully  competent  double  entry  bookkeeper  by  mastering  these  lessons,  pro- 
vided he  is  proficient  in  Arithmetic  and  Penmanship  or  makes  himself  proficient  in  these  subjects. 

In  order  that  the  student  may  easily  and  quickly  acquire  a  practical  working  knowledge  of 
Double  Entry  Bookkeeping,  he  is  taught  the  principles  in  the  following  order: 

First.  How  to  keep  the  Cash  Book; — when  to  debit  cash,  when  to  credit  cash,  what  explana- 
tions to  use;  how  to  balance  cash  daily,  how  to  open  and  keep  a  bank  account,  and  how  to  reconcile 
the  bank  balance. 

Second.  When  to  debit  and  when  to  credit  Personal  accounts,  Property  accounts,  Expense 
accounts,  and  the  principle  of  Double  Entry  Bookkeeping. 

Third.  How  to  keep  the  Journal ;  what  to  enter  in  the  Journal  and  what  in  the  Cash  Book ; 
how  to  Post;  how  to  take  a  Trial  Balance;  the  proper  forms  of  Bills  or  Invoices  and  Statements; 
the  importance  of  Collections  and  how  to  make  them. 

Fourth.     How  to  Open  a  New  Set  of  Books  and  how  to  keep  Stock  accounts. 

Fifth.  How  to  keep  Private  accounts;  the  Loss  and  Gain  account;  how  to  make  up  a  Six 
Column  Statement;  and  how  to  Close  a  Set  of  Books. 

Sixth.  About  Notes  and  Drafts;  how  to  keep  a  Bills  Receivable  account  and  a  Bills  Payable 
account;  how  to  keep  the  Bill  Book;  how  to  keep  an  Interest  and  Discount  account. 

Seventh.  About  the  indexing  of  the  Ledger,  the  arrangement  of  accounts  in  the  Ledger,  the 
use  of  a  General  Ledger,  a  Sales  Ledger  and  a  Purchase  Ledger. 

Eighth.  About  the  use  of  Columnar  Books;  the  use  of  a  Sales  Book,  an  Invoice  Book,  and  a 
Petty  Cash  Book. 

Ninth.  About  the  subdivision  of  the  Merchandise  account; — the  Merchandise  Purchases 
account;  the  Cash  Discount  on  Purchases  account;  the  Purchases  Returned  account;  the  Freight 
Inward  account;  the  Merchandise  Sales  account;  the  Cash  Discount  on  Sales  account;  the  Sales 
Returned  account  and  the  Freight  Outward  account. 

Tenth.     About  Partnerships,  Leases,  and  Fire  Insurance. 

Eleventh.  How  to  keep  Controlling  accounts;  how  to  use  the  Bill  Book  as  a  book  of  original 
entry. 

Twelfth.  How  to  keep  books  by  Single  Entry  and  how  to  change  books  from  Single  Entry 
to  Double  Entry. 

Thirteenth.  How  to  do  bookkeeping  for  a  Commission  business;  about  Shipments  and  Con- 
signments; the  use  of  the  Receiving  Book,  the  Consignment  Ledger,  the  Customers  Ledger,  the 
General  Ledger,  and  the  Account  Sales. 

Fourteenth.  Corporation  bookkeeping;  Capital  Stock  account;  Unissued  Stock  account; 
Subscribed  Stock  account;  Subscribers  account;  Treasury  Stock  account;  Undivided  Profits 
account;  Dividend  account;  Surplus  account;  the  Minute  Book;  the  Stock  Ledger;  the 
Dividend  Book. 

Fifteenth.     The  Voucher  System,  with  forms  for  the  Voucher  Book  and  the  Voucher  Register. 

Sixteenth.     Profit  and  Loss  Statements  and  Balance  Sheets. 

3 


405336 


4  :'\':WoiiXR^l  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Seventeenth.     Cost  Accounting;  the  Per  Cent  method;  Rate  Calculations. 

Eighteenth.    Auditing . 

The  book  contains  data  for  a  sufficient  amount  of  practice  in  the  art  of  bookkeeping  to  develop 
efficient  bookkeepers. 

The  methods  of  Bookkeeping  and  Accountancy  illustrated  and  taught,  are  those  in  use  at 
this  time  by  the  best  Certified  Public  Accountants.    - 

A  knowledge  of  the  best  business  practice  is  imparted  to  the  student  in  these  lessons  and  this 
training  will  be  helpful  in  preparing  anyone  for  an  administrative  position. 

The  fact  that  one  of  the  authors  of  this  book  has  been  for  the  past  twenty-five  years  the  head 
of  what  is  today  one  of  the  largest  business  schools  in  the  United  States,  and  that  -the  other  author 
is  a  practicing  Certified  Public  Accountant  under  the  laws  of  the  State  of  Pennsylvania,  guarantees 
the  quality  of  the  instruction  contained  in  it. 


Bookkeeping. 


1 .  Bookkeeping  consists  of  keeping  a  properly  classified,  accurate  record  of  all  of  the  business 
transactions  performed  in  the  business  for  which  the  books  are  kept. 

2.  Double  Entry  Bookkeeping  is  a  system  of  bookkeeping  in  which  there  are  two  entries — 
a  debit  and  a  credit — equal  in  amount,  for  every  transaction. 

3.  Single  Entry  Bookkeeping  is  a  simple  system  of  bookkeeping  in  which  there  is  only  one 
entry  for  many  of  the  transactions. 

The  Cash  Account  or  Cash  Book. 

4.  In  keeping  a  Cash  Account  or  a  Cash  Book,  whenever  cash  is  received  you  mark  it  down 
on  the  left-hand  side  of  the  account  or  left-hand  page  of  the  Cash  Book  and  whenever  cash  is 
paid  out  you  mark  it  down  on  the  right-hand  side  of  the  account  or  right-hand  page  of  the  Cash 
Book.     See  illustration  on  pages  10  and  11. 

5.  The  left-hand  side  of  all  accounts  is  always  called  the  DEBIT  side  and  whenever  you 
mark  anything  down  or  make  an  entry  on  the  left-hand  side  of  an  account,  you  are  said  to  debit 
that  account.  The  right-hand  side  of  all  accounts  is  always  called  the  CREDIT  side  and  when- 
ever you  mark  anything  down  or  make  an  entry,  on  the  right-hand  side  of  an  account,  you  are 
said  to  credit  that  account. 

6.  In  making  entries  in  a  Cash  Book,  the  date  is  put  in  the  date  column,  the  amount  is  put 
in  the  money  column  and  whatever  explanation  may  seem  necessary  or  desirable  is  put  in  the 
explanation  column. 

The  usual  explanation  on  the  debit  side  of  the  cash  book  is  the  name  of  the  person  from  whom 
the  cash  is  received  and  some  explanation  such  as  "On  Account"  or  "In  Full"  or  "Bill  of  (date 
of  bill  for  which  payment  is  received)"  or  the  name  of  the  account  that  is  to  be  credited,  as  "Mer- 
chandise," and  some  explanation  such  as  "Cash  Sales"  or  the  name,  or  a  description  of  what  is 
sold. 

The  usual  explanation  on  the  credit  side  of  the  cash  book  is  the  name  of  the  person  to  whom 
the  cash  is  paid  with  some  explanation  such  as  "On  Account,"  "In  Full,"  or  "bill  of  (date  of  the 
bill  paid)"  or  the  name  of  the  account  that  is  to  be  debited,  as  "Merchandise"  or  "Expense," 
and  some  explanation,  such  as  an  enumeration  of  the  articles  purchased  or  of  the  expenses  paid. 
See  illustration  on  pages  10  and  11. 

7.  Checks,  Post  Office  Money  Orders,  Express  Money  Orders,  Bank  Drafts  and  Sight  Drafts 
are  considered  and  entered  as  cash.  For  information  about  checks,  post  office  money  orders, 
express  money  orders,  bank  drafts  and  sight  drafts,  see  pages  16  to  19. 

8.  If  the  cash  account  is  debited  at  the  start  for  all  cash  on  hand  as  it  always  should  be, 
and  then  is  debited  for  all  cash  received  and  is  credited  for  all  cash  paid  out,  the  difference  be- 
tween the  debit  and  credit  sides  of  the  cash  account  will  always  be  the  same  as  the  amount  of 
cash  on  hand.     For  method  of  proving  cash,  see  article  13. 

9.  Whatever  money  we  have  on  deposit  in  bank  is  counted  as  part  of  our  cash  on  hand  just 
the  same  as  though  we  had  it  in  our  own  cash  drawer  or  had  it  locked  up  somewhere  for  safe  keep- 
ing. In  view  of  this  fact  we  do  not  make  any  entry  in  our  cash  book  when  we  deposit  money  in 
bank,  but  simply  add  the  amount  of  the  deposit  to  the  balance  already  in  bank  as  shown  by  the 
record  on  our  check  book  stub,  or  by  the  record  of  our  balance  in  bank  wherever  we  keep  such 
record. 


6  MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE. 

When  we  give  a  check,  it  is  just  the  same  as  though  we  paid  out  the  amount  of  cash  for  which 
the  check  is  drawn,  since  the  bank  pays  out  that  much  of  the  money  we  have  on  deposit  with  it, 
and  therefore  an  entry  must  be  made  in  our  cash  book  for  every  check  we  give,  and  the  amount 
must  be  deducted  from  the  balance  on  deposit  in  bank,  which  is  generally  shown  on  the  check 
book  stub. 

Study  carefully  the  instruction  given  in  articles  14  to  28  inclusive,  relative  to  checks,  post 
office  money  orders,  express  money  orders,  bank  drafts,  sight  drafts,  opening  a  bank  account, 
endorsements  and  receipts.     See  page  16. 

10.  When  you  know  what  has  been  taught  thus  far,  and  have  studied  articles  14  to  28  in- 
clusive as  directed,  turn  to  exercise  No.  1  and  think  how  you  would  make  the  entry  for  each  trans- 
action give  in  that  Exercise.  Immediately  after  deciding  how  you  would  make  the  entry  for  each 
transaction,  turn  to  the  illustration  on  pages  10  and  11,  and  see  whether  the  transaction  is  entered 
on  the  page,  and  in  the  manner,  you  thought  it  should  be  entered.  If  you  find  that  you  have  made 
any  mistake  as  to  the  page  on  which  the  entry  should  appear  or  as  to  the  proper  form  for  the  ex- 
planation, study  articles  4,  5  and  6  over  again  until  you  are  sure  that  you  know  what  is  taught 
in  them,  then  try  again.  Follow  this  plan  until  you  can  tell  without  looking,  on  which  page  each 
entry  should  appear  and  what  the  form  of  the  explanation  should  be. 

11.  After  you  have  examined  the  transactions  in  Exercise  No.  1  as  directed,  turn  to  page 
7,  and  write  answers  to  the  questions  in  Test  No.  1.  When  you  can  answer  all  of  the  questions 
in  Test  No.  1  to  your  own  satisfaction  without  referring  to  the  text  book,  you  may  apply  to  the 
College  Currency  Department  for  Exercise  No.  1  Packet,  which  contains  all  of  the  cash  received  in 
Exercise  No.  1.  You  are  expected  to  handle  this  cash  as  though  it  were  real  money.  You  will 
verify  daily  the  amount  that  you  receive  for  each  day's  transactions  and  will  be  responsible  for 
the  return  to  the  College  Currency  Department  of  the  amount  that  you  should  have  on  hand  at 
the  end  of  the  Exercise.  You  will  open  an  account  with  the  bank,  will  make  a  deposit  daily  if 
you  have  sufficient  cash  on  hand;  will  pay  all  of  your  large  bills  by  check;  will  pay  out  all  paid- 
out  items  into  an  out-going  College  Currency  container,  or  an  outgoing  Check  container, 
the  contents  of  which  will  be  collected  daily  by  runners  from  the  College  Currency  Depart- 
ment and  the  College  Bank,  respectively.  The  list  of  paid  out  items,  which  the  runners  will  re- 
ceipt, must  agree  with  the  amount  of  currency  and  checks  delivered  to  the  runners.  In  connec- 
tion with  handling  the  money,  you  should  now  make  the  cash  book  entry  for  each  transaction  in 
Exercise  No.  1,  without  referring  to  the  illustration.  After  you  have  written  up  Exercise  No.  1 
and  proved  your  cash,  you  shall  examine  it  carefully  or  audit  it,  and  if  you  believe  it  to  be  correct, 
you  shall  then  submit  it  to  your  teacher  for  approval. 

After  Exercise  No.  1  has  been  approved  by  the  teacher,  you  shall  turn  in  to  the  College  Cur- 
rency Department  your  balance  of  cash  from  Exercise  No.  1,  and  take  out  Exercise  No.  2  Packet, 
and  shall  work  out  Exercise  No.  2  just  as  Exercise  No.  1  was  worked  out.  After  you  have  finished 
Exercise  No.  2,  you  shall  audit  it  and  then  submit  it  to  the  teacher  for  approval. 

All  of  the  Exercises  and  Sets  in  this  book  are  to  be  treated  in  the  same  way.  You  will  first 
get  the  necessary  Packet  from  the  College  Currency  Department  and  work  out  the  Exercise  or 
Set,  then  examine  it  carefully  for  possible  errors  and  after  that,  submit  it  to  your  teacher  for  ap- 
proval. No  Exercise  or  Set  is  to  be  submitted  for  the  teacher's  approval  until  you  have  first 
audited  it  yourself. 

Beginners  are  apt  to  make  errors  through  carelessness,  but  insistence  upon  the  part  of  your 
teacher  that  you  shall  find  all  of  your  own  errors,  will  soon  teach  you  the  importance  of  accuracy 
in  all  of  your  work,  and  you  will  verify  all  of  your  additions,  subtractions  and  multiplications,  and 
by  having  everything  right  or  finding  your  own  errors  if  you  make  any,  you  will  soon  develop  the 
confidence  in  yourself  that  is  so  essential  to  every  bookkeeper. 

The  succeeding  Exercise  or  Set  is  not  to  be  begun  until  the  teacher  has  approved  the  Exercise 
or  Set  that  you  have  finished. 


MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.  7 

12.  Every  bookkeeper  should  know  how  to  do  ruling  neatly.  To  do  this,  lay  your  rule  so 
that  the  edge  of  the  rule  that  is  to  guide  the  pen  is  up  away  from  the  paper  and  farthest  from  you. 
This  will  enable  you  to  rule  clean  lines  without  blotting  the  paper,  and  by  holding  the  pen  at  a 
slightly  different  angle,  you  can  rule  a  double  line  without  changing  the  position  of  the  rule.  For 
practice  in  ruling,  take  a  sheet  of  paper  and  rule  it  so  that  it  will  show  all  of  the  red  lines  that  ap- 
pear on  page  76  of  this  text  book.  Repeat  this  exercise  daily  until  your  teacher  O.K's  your  skill 
in  ruling. 

WRITTEN  TEST  NO.   1. 

1.  What  is  the  first  entry  you  make  on  opening  a  Cash  account  or  Cash  Book? 

2.  Which  is  the  DEBIT  and  which  is  the  CREDIT  side  of  the  Cash  Book? 

3.  Will  the  same  rule  as  to  which  is  the  debit  side  and  which  is  the  credit  side  hold  good  for 
all  other  accounts  or  not? 

4.  When  do  you  debit  the  Cash  account? 

5.  When  do  you  credit  the  Cash  account? 

6.  What  explanation  is  usually  put  on  the  debit  side  of  the  Cash  Book? 

7.  What  explanation  is  usually  put  on  the  credit  side  of  the  Cash  Book? 

8.  How  do  you  debit  the  Cash  account  and  how  do  you  credit  it? 

9.  What  else  besides  money  is  considered  as  cash  and  entered  in  the  Cash  Book  accordingly? 

10.  How  can  you  tell  from  your  Cash  account  how  much  money  you  have  on  hand? 

11.  If  on  counting  the  money  in  your  cash  drawer  you  do  not  find  an  amount  equal  to  the 
difference  between  the  debit  and  credit  sides  of  your  Cash  Book,  what  does  that  prove? 

12.  Where  else  besides  in  your  cash  drawer  is  part  of  your  cash  on  hand  likely  to  be? 

13.  What  entry  or  entries  do  you  make  when  you  deposit  money  in  bank? 

14.  What  entry  or  entries  do  you  make  when  you  give  a  check? 

15.  What  entry  do  you  make  when  you  receive  a  check?  A  sight  draft?  A  money  order? 
A  bank  draft?     Cash? 

16.  What  do  you  usually  do  with  checks,  money  orders  and  drafts  that  you  receive? 

17.  What  entry  do  you  make  when  you  buy  a  bank  draft  or  money  order  to  send  away? 
When  you  pay  out  cash?    When  you  give  a  check? 

•    18.     What  is  a  check?     A  post-office  money  order?     A  bank  draft?     An  express  money 
order?     A  sight  draft? 

19.  When,  where  and  how  should  endorsements  on  checks  be  made? 

20.  Tell  how  to  open  a  bank  account. 

21.  Tell  how  to  make  a  deposit  in  bank. 

22.  Explain  the  check  book  stub  method  of  keeping  account  of  the  money  you  have  in  bank. 

EXERCISE  NO.   1. 

RETAIL  FURNITURE  BUSINESS  OF &  CO. 

(Student's  name) 

SEPT.  3,  19—. 

Cash  on  hand  $976.     (Verify  this.) 

Open  a  bank  account.     Deposit  $950. 

Sell  1  oak  chiffonier  for  $18.75. 

Sell  \  doz.  cane  seat  dining  room  chairs  for  $7.50. 

Sell  1  cherry  finish  rocker  for  $5. 

Sell  1  oak  wardrobe  for  $14. 

Issue  check  to  Wm.  H.  W.  Quick  &  Bro.,  Inc.  for  Sept.  store  rent,  $75. 

Pay  $8.35  for  freight  on  shipment  received  today  from  Rivers  Furniture  Co. 

Prove  your  cash  daily.     See  article  13. 


8  MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS   PRACTICE. 

SEPT.  4. 

Receive  post-office  money  order  for  $12.50  from  J.  D.  Thomas  in  settlement  of  acct. 

Send  Perfection  Mattress  Co.  order  for  1  doz.  No.  1  irattresses,  and  enclose  check  for  $30  in 
payment  for  same- 
Sell  1  ten  piece  chamber  suit,  complete  with  spring  and  mattress,  for  $54. 

Sell  40  yds.  matting  at  25^  per  yard,  $10. 

Pay  upholsterer  for  laying  40  yds.  matting,  $2. 

Pay  for  repairs  to  furniture  wagon,  $9.60. 

Pay  for  2  tons  No.  2  hard  coal,  $11.50. 

Sell  4  kitchen  chairs  and  kitchen  table  for  $3.50. 

Make  a  deposit  at  the  close  of  each  day's  business  if  you  have  any  checks  on  hand  or  if 
you  have  more  than  $50  on  hand. 

SEPT.  5. 

Sell  4  three  piece  oak  chamber  suits  at  $18.50  each. 

Receive  sight  draft  for  $83  on  Henderson,  Green  &  Co.,  Commission  Merchants,  from  L.  F. 
Adams,  one  of  our  country  customers,  in  settlement  of  his  account. 

Send  Cedar  Rapids  Furniture  Co.  check  for  $237.20  in  settlement  of  account. 

Sell  1  Morris  chair  for  $4.50. 

Sell  1  Pompadour  parlor  suit  to  Mr.  C.  N.  Roderick  for  $85. 

Send  an  order  to  the  Hartwell  Furniture  Co.,  Cincinnati,  for  \  doz.  leather  couches  at  $25 
each,  enclosing  check  for  same. 

Receive  money  order  from  O.  J.  Bruce  for  $19.25  in  settlement  of  account. 

Buy  10  bu.  oats  at  45c"  per  bu.,  and  1  bale  hay  at  $2. 

SEPT.   6. 

Sell  1  six-foot  extension  table  for  $9. 

Sell  three  brass  bedsteads  at  $20  each. 

Sell  1  velour  couch,  large  size,  for  $18. 

Sell  set  of  6  leather  seat  library  chairs  for  $45. 

Sell  1  ten-section  Globe-Wernicke  book-case  for  $32.50. 

Pay  gas  bill  for  August,  $13.50. 

Send  Rivers  Furniture  Co.  check  for  $150  in  settlement  of  bill  of  July  10th. 

Sell  5  XXX  springs  at  $3  each. 

Pay  Oldershaw  &  Son  for  repairs  to  furnace,  $38.     (Pay  by  check.) 

Pay  for  advertisement  in  Tuesday's  "Herald,"  $21.     (Pay  by  check.) 

SEPT.   7. 

Receive  check  from  Alfred  Brown  in  settlement  of  bill  of  August  1st,  $63. 

Receive  money  order  from  F.  N.  Smith  for  $15  to  be  applied  on  account. 

Sell  3  upholstered  chairs  for  $27. 

Sell  1  spring  for  $4. 

Pay  the  Wilson  Furniture  Co.,  on  account,  $50.     (Check.) 

Sell   1   Excelsior  parlor  suit  for   $39. 

Sell  3  single  wardrobes  at  $10  each. 

Sell  dining  room  outfit — table,  8  chairs  and  side-board — for  $42. 

Receive  for  Sept.  rent  of  furniture  out  on  rental  at  the  "Blue  Mountain  House,"  $135 
(Check.) 

Pay  fire  insurance,  1  year's  premium  on  policy  for  $10,000— from  Sept.  1,  19 —      to  Sept.  ly 
19—,  $80.     Check  to  Henry  M.  Paist,  our  insurance  broker. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE. 

SEPT.  9. 

Sell   1  claw  foot  center  table,  mahogany,  $26. 
Sell  3  curly  birch  rockers  at  $5.50  each. 
.   Sell    quartered    oak    chiffonier    for 
Sell   plate  glass  door  wardrobe  for 
Pay  John  Jones,  clerk,  $12  for  week  ending  today. 
Pay  P.  Murphy,  driver,  $9  for  week  ending  today. 

Pay  for  2,000  bill-heads,  1,000  letter-heads  and  2,000  printed  envelopes,  $6.50. 
Issue  check  to  the  Enterprise  Furniture  Co.  to  apply  on  account,  $250. 
Make  a  deposit. 
Have    bank    book    balanced. 

Reconcile  your  bank  balance.     See  article  20.     Page  21. 

Pay  the  amount  of  your  cash  on  hand  to  the  College  Currency  Department  by  currency  and 
check. 

EXERCISE   NO.   2. 

WHOLESALE     HARDWARE     BUSINESS     OF &     CO. 

(Student's  name) 

JAN.  7,  19—. 

Cash  on  hand,  $1285.19.     Verify. 

Make    a    deposit. 

Sell  to  X  R.  M.  Adams,  2  doz.  carpet  sweepers  at  $29.14,  $58.28. 

Sell  to  J.  C.  Bailey,  14  cherry  stoners  at  $5.10,  $71.40. 

Sell  to  Miller  Supply  Co.,  10  meat  cutters  at  $51,  1  doz.  egg  beaters  at  $7.52,  total  $517.52. 

Sell  to  J.  F.  Pearson  &  Co.,  4  doz.  drawing  knives  at  $8.90,  $35.60. 

Buy  from  Fred.  Beck  &  Co.,  4  doz.  carpet  stretchers  at  $5.82,  $23.28.     (Check.) 

Make  a  deposit  at  the  close  of  each  day's  business. 

Prove  your  cash  daily. 

JAN.  8. 

Receive  check  from  Oscar  Bear  for  $143.37  in  full. 

Pay  National  Tool  &  Stamping  Co.,  by  check,  $342.65,  for  bill  of  Dec.  15th. 
Receive  from  Edw.  Stinson  &  Co.,  check  for  $525.83  in  full. 
Sell  to  Geo.  Keller,  10  doz.  curry  combs,  at  $6.87,  $68.70. 

Sell  to  Reily  Bros.  &  Raub,  10  hand  cultivators  at  $15,  I  gross  auger  handles  at  $3.75,  total 
$153.75. 

Buy  from  Geo.  P.  Thomas,  1  gross  weeding  hoes  at  $97.90.     (Check.) 

JAN.  9. 

Pay  Jas.  Bates  by  check,  $57.50  bill  of  Dec.  22nd. 
Pay  Wm.  Cole  &  Son,  by  check,  $125  on  account. 
Received  from  Chas.  T.  Mitchell,  check  for  $89.75  for  bill  of  Dec.  8th. 
Receive  from  John  Brown  &  Sons,  check  for  $275.86  in  full. 
Sell  to  Jas.  Brady,  1  doz.  level  winding  jeweled  fishing  reels  at  $76. 

Sell  to  Keystone  Hdwe.  Co.,  2  hand  cultivators  at  $13,  1  doz.  hammers  at  $2.09,  total,  $28.09. 
Sell  to  Central  Pa.  Supply  Co.,  12  doz.  frying  pans  at  $8,  1  doz.  blind  hinges  at  $2.85,  total, 
$98.85. 


10 


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12        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE. 

JAN.    10. 

Receive  from  Wilcox  Hdwe.  &  Iron  Co.,  check  for  $321.37  in  full. 
Receive  from  Geo.  Yakel  &  Co.,  check  for  $275.25  for  bill  of  Dec.  15th. 
Pay  John  W.  Russell,  by  check,  $87.50  en  account. 
Buy  of  Diamond  State  Iron  Co.,  5  oak  cabinets  at  $19.50,  $97.50. 

Sell  to  Baltimore  Hdwe.  Co.,  10  doz.  gate  hinges  at  $5.60,  1  doz.  files  at  $2.75,  total  $58.75. 
Buy  of  Henry  Keidel  Co.,  48  doz.  hay  knives  at  $10,  12  doz.  harness  snaps  at  $1.50,  total 
$498. 

Sell  to  J.  R.  Emerson  &  Co.,  2  Little  Giant  meat  cutters  at  $39.24,  $78.48. 
Sell  to  Baltimore  Hdwe.  Co.,  4  doz.  razors  at  $9.10,  $36.40. 
Sell  to  Dillon  &  Co.,  1  doz.  lawn  swings  $83.95. 

JAN.    12. 

Sell  to  Lindamuth  &  Co.,  100  doz.  cans  metal  polish  at  $3.50,  $350. 

Sell  to  J.  H.  Bowman  Co.,  2  gross  kraut  cutters  at  $20,  1  doz.  scythe  stones  at  $6.45,  total 
$46.45. 

Sell  to  F.  H.  Davidson  &  Co.,  4  doz.  screen  doors  at  $9.50,  $38. 

Sell  to  M.  L.  Bauserman  &  Co.,  12  doz.  knives  and  forks  at  $3.50,  48  doz.  gate  hinges  at  $4, 
total  $234. 

Have  your  bank  book  balanced. 

Reconcile  your  bank  balance. 

Pay  the  amount  of  your  cash  on  hand  to  the  College  Currency  Department. 

EXERCISE   NO.    3. 

WHOLESALE  DEUG  BUSINESS  OF &  CO. 

(Student's  name) 

JAN.  1,  19—. 

Cash  on  hand,  $1875.28.     Verify. 

Make   a   deposit. 

Sell  to  Double  &  Co.,  1  gross  boxes  Anti-billious  Pills  at  40j£  per  box,  $57.60. 

Sell  to  M.  B.  Schmeilt,  1  gross  bottles  Panepentic  Tablets  at  $3  per  doz.,  $36. 

Sell  to  R.  W.  Stone,  2  gross  boxes  special  Gelatin  Coated  Cathartic  Pills  at  50^  per  box,  $144. 

Sell  to  Double  &  Co.,  1  gross  4  oz.  bottles  Hydriodic  Acid  at  $1  per  bottle,  $144. 

Sell  to  John  J.  Long,  1  gross  Aromatic  Cod  Liver  Oil  at  $7.50  per  doz.,  $90. 

Buy  of  Sharp  &  Dohme,  3  gross  Extract  Witch  Hazel  at  $2.90  per  doz.,  $104.40. 

Buy  of  Hance  Bros.  &  Wight,  5  gross  bottles  Aromatic  Cod  Liver  Oil  at  $6  per  doz.,  $360. 

Sell  to  Miller  &  Davis,  8  doz.  bottles  Syrup  Hypophosphites  at  $7.50,  $60. 

Receive  from  Arnold  &  Co.,  $100  on  account. 

Make  a  deposit  daily. 

Prove  your  cash  daily. 

JAN.   2. 

Buy  of  Shackman  &  Loewy  5  gross  Cascarets  at  $2  per  doz.,  $120. 
Send  check  to  Smith  Bros.  &  Co.,  for  $200  on  account. 
Receive  check  from  Jas.  P.  Frames  &  Son  for  $36  in  full. 

Sell  to  Henry  Schmidt,  5  doz.  boxes  Black's  Feric  Pills  at  30^  per  box,  $18,  and  3  doz.  Chloro- 
form Liniment  at  20^  per  bottle,  $7.20,  total  $25.20. 

Buy  of  Gilbert  Bros.,  4  gross  Crystal  Castor  Oil  at  $1.25  per  doz.,  $60.     (Check.) 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        13 

Sell  to  Doan  &  Carter,  3  gross  Extract  Vanilla  at  $2  per  doz.,  $72. 

Sell  to  Miller  &  Shower,  1  gross  Jamaica  Ginger,  select,  at  $1.75  per  doz.,  $21. 

Receive  of  Jos.  W.  Moore  &  Co.,  check  for  $125  for  bill  of  Dec.  10th. 

Pay  Winkleman-Brown  Drug  Co.,  $100  on  account. 

Receive  check  from  Paul  Hauser  for  $57.60  in  full. 

Send  check  to  Gilpin,  Langdon  &  Co.,  for  $45  in  full  to  date. 

Sell  Thomas  Finch  &  Son,  10  gross  Soda  Mints  at  70^  per  doz.,  $84. 

Sell  to  National  Drug  Co.,  5  doz.  Eagle  Brand  Condensed  Milk  at  $2  per  doz.,  $10. 

Receive  check  from  Chas.  Ware  for  $10  on  account. 

Buy  of  Sharp  &  Dohme,  5  doz.  Extract  Cinchona  at  $1.50  per  bottle,  $90. 

JAN.  4. 

Send  check  to  W.  J.  Parker  &  Co.,  for  $250  on  account. 

Buy  of  Hance  Bros  &  Wight,  5  doz.  Fluid  Extract  Cantharides  at  $5  per  bottle,  $300. 

Pay   Stevenson   &   Harmanson   $120   on   account. 

Buy  of  Sharp  &  Dohme,  6  gross  boxes  Tasteless  Quinine  Tablets  at  $1.25  per  doz.,  $90. 

Sell  Burkhart  &  Brown,  1  gross  bottles  sewing  machine  oil  at  45^  per  doz.  $5.40. 

JAN.  5. 

Sell  Becker  &  Anderson,  15  lbs.  Ginger  Root  at  24^  per  lb.,  $3.60;  1  doz.  boxes  Tanglefoot  Fly 
Paper  at  35^  per  box,  $4.20;  and  1  gross  Camphorated  Toilet  Soap  at  $1.20  per  doz.  $14.40,  total 
$22.20 

Sell  to  J.  H.  McVeigh  &  Co.,  1  doz.  bottles  Avene  Sativa  at  $5.10  per  doz. 

Buy  of  Sharp  &  Dohme,  6  doz.  Black  Cohosh  at  $4.50  per  doz.,  $27.00. 

Pay  Jas.  Bailey  &  Son  on  account,  $300. 

Pay  John  Hurth  &  Co.,  $50.     Bill  of  Dec.  14th. 

Receive  from  Chas.  Sears  check  for  $150  on  account. 

Have  your  bank  book  balanced. 

Reconcile   your   bank   balance. 

Pay  the  amount  of  your  cash  on  hand  to  the  College  Currency  Department. 

EXERCISE  NO.  4. 

WHOLESALE   GROCERY  BUSINESS  OF \ &   CO. 

(Student's  name) 

JAN.  1,  19—. 

Cash  on  hand,   $4351.16.     Verify. 
Make    a    deposit. 

Sell  Boyer  &  Co.,  10  cases  Lion  Brand  Coffee,  24  packages  to  the  case,  at  $2.50  per  case,  $25. 
Sell  Jordan  Stabler  &  Co.,  25  bbls.  GambrilPs  Best  Flour  at  $4.40  per  bbl.,  $110. 
Sell  Reitz  Bros.,  8  boxes  Ivory  Soap,  large  size,  at  $6,  $48. 
Pay  Thos.  G.  Cranwell  &  Co.,  on  account,  $500. 

Sell  Bryant  &  Clarvoe,  10  cases  Quaker  Oats,  24  packages  to  the  case,  at  $2.25,  $22.50. 
Receive  check  from  Gold  Bros.,  on  account,  $150. 

Pay  sight  draft  of  C.  A.  Gambrill  Mfg.  Co.,  for  $1,000.     (Certified  check.) 
Buy  of  Woolson  Spice  Co.,  100  bbls.  granulated  sugar,  total  weight  34,362  lbs.,  at  b\i  per 
lb.,   $1804.     (Check.) 

Send  check  to  National  Biscuit  Co.,  to  apply  on  account,  $1,000. 
Receive  on  account  from  Bryant  &  Clarvoe,  check  for 


14        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 


Sell  Boyer  &  Co.,  15  cases  Eagle  Brand  Tomatoes,  24  cans  to  the  case,  at  $1.50  per  case,  $22.50. 
Make  a  deposit  daily. 
Prove  your  cash  daily. 

JAN.  2. 

Receive  check  from  McGaw  &  Co.,  on  account,  for  $953.92. 

Sell  Jordan  Stabler  &  Co.,  20  bbls.  granulated  sugar,  total  weight  6,851  lbs.,  at  5f^per  lb., 
8393.93. 

Sell  Wm.  Jackson  5  bbls.  granulated  sugar,  weighing  respectively  337,  353,  340,  344,  and 
342  lbs.,  at  b\i  per  lb.,  $98.67,  and  6  bbls.  GambrilPs  Best  Flour  at  $4.40  per  bbl.,  $26.40,— total 
$125.07. 

Sell  L.  W.  Johnson,  100  lbs.  California  Evaporated  Peaches  at  12^  per  lb.,  $12,  and  10  cases 
Eagle  Brand  Corn,  24  cans  to  the  case,  at  $1.75  per  case,  $17.50,  total  $29.50. 

Send  National  Biscuit  Co.,  on  account,  check  for  $400. 

Receive  check  from  Jordan  Stabler  Co.  for  $536  for  bill  of  Dec.  1st. 

Sell  Reitz  Bros.  6  bbls.  Goldenrod  Syrup,  containing  respectively  48,  55,  57,  45,  50,  and  53 
gals.,  at  32^  per  gal.  $98.56. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  200  bbls.  Gambrill's  Best  Flour  at  $4  per  bbl.,  $800. 

Sell  Gold  Bros.,  3  bbls.  cider  vinegar  at  $2.52  per  bbl.,  $7.56. 

Buy  from  National  Biscuit  Co.,  300  cases  Uneeda  Biscuit  at  $1.75  per  case,  $525. 

JAN.  3. 

Sell  Maynadier  &  Co.,  25  cases  Uneeda  Biscuit  at  $2  per  case,  $50. 
Sell  Percy  M.  Reese,  500  lbs.  best  mixed  Mocha  and  Java  Coffee  at  30^  per  lb.,  $150. 
Receive  from  Reitz  Bros.,  on  account,  check  for  $125. 

Buy  from  Woolson  Spice  Co.,  100  cases  Lion  Brand  Coffee  at  $2.12^  per  case,  $212.50. 
Sell  Bryant  &  Clarvoe,  24  doz.  Eagle  Brand  Corn  at  $1.50  per  doz.,  $36. 
Buy  from  C.  A.  Gambrill  Mfg.  Co.,  50  bbls.  Superior  Flour  at  $3.75  per  bbl.,  $187.50. 
Sell  Snyder  &  Co.,  3  bbls.  granulated  sugar,  weighing    339,  346  and  336  lbs.,  total  weight, 
1,021  lbs.,   at   b\i  per  lb.,   $58.71. 

Sell  Gold  Bros.,  6  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  $26.40. 

Sell  Reitz  Bros.,  15  cases  Uneeda  Biscuit  at  $2  per  case,  $30. 

Have  your  bank  book  balanced. 

Reconcile  your  bank  balance. 

Pay  the  amount  of  your  cash  on  hand  to  the  College  Currency  Department. 


13.    Daily  Proof  of  Cash. 


d?,/?— 


/<7j2,/.-z>3~   Debit  side  of  Cash  Book 
>;7..^r  Credit  side  of  Cash  Book 
^,?t:<^7    Cash  on  hand  per  Books. 
£jis  fd  In  Cash  Drawer,  Safe,  etc. 

fyr-r.       In  Bank 


&.? r.4-0  Cash  on  hand. 


Make  this  Daily  Proof  of  Cash 
on  the  back  of  a  check  book  stub, 
for  the  date  of  the  proof,  so  that  it 
will  be  preserved  for  future  reference 
if  needed. 

If  everything  has  been  entered 
correctly  and  no  money  has  been 
lost  or  stolen,  the  cash  on  hand  as 
per  books  and  the  actual  cash  on 
hand  will  be  the  same.  If  the  figures 
do  not  agree,  find  your  mistake  or 
find  the  money. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        15 

Recount  your  cash.  Go  over  your  additions  in  the  Cash  Book.  Verify  your  subtraction  to 
find  the  balance  on  hand.  Examine  your  check  book  stubs  to  see  that  the  deposit,  if  any,  has  been 
properly  entered  and  correctly  added  and  that  the  checks  issued,  if  any,  have  been  subtracted 
correctly.  If  any  person  besides  yourself  has  access  to  the  cash  drawer,  find  out  whether  or  not 
any  money  has  been  taken  in  or  paid  out  without  a  proper  entry  having  been  made  for  it.  Ques- 
tion any  person  who  is  accustomed  to  take  funds  for  temporary  uses  from  the  drawer  and  who 
generally  leaves  an  I.O.U.  It  is  possible  that  this  person  forgot  to  put  an  I.O.U.  ticket  into  the 
drawer  when  he  took  out  funds  during  the  day,  or  m.ajybe  he  returned  funds  without  taking  back 
his  ticket. 

If,  after  having  done  as  above  directed,  you  still  have  not  found  the  mistake,  examine  every 
entry  for  the  day  to  see  whether  you  can  discover  a  mistake  in  some  entry  or  whether  some  entry 
that  you  see  brings  to  your  mind  some  transaction  that  you  failed  to  enter.  Make  a  resolution 
that  in  the  future  you  will  always  make  your  entry  before  you  issue  a  receipt  for  any  money  com- 
ing in  and  that  you  will  always  make  your  entry  before  you  part  with  any  money  that  you  are 
paying  out.  Some  bookkeepers  advise  the  balancing  of  cash  before  the  deposit  for  the  day  is 
made,  so  that  if  the  cash  does  not  balance  properly,  all  checks  received  can  be  compared  with  the 
entries  for  them.  Other  bookkeepers  keep  a  carbon  copy  or  a  letter  press  copy  of  every  deposit 
slip  for  the  purpose  of  checking  in  the  event  of  an  error  having  been  made.  You  should  do  this 
if  the  firm -for  which  you  are  working  wishes  it  done.  It  is  far  more  important,  however,  to  con- 
centrate your  mind  on  your  work  in  all  cases,  and  to  prove  your  work  as  you  go  along.  You  will 
in  this  way  avoid  many  errors. 

If  an  error  has  been  made  and  you  cannot  find  it,  as  soon  as  you  reach  this  conclusion,  on  the 
same  day  that  you  discover  the  discrepancy,  you  should  report  it  to  your  superior  or  to  the  man- 
ager or  proprietor  of  the  business  and  follow  his  instructions. 

One  of  the  common  ways  of  handling  such  a  situation  is  to  put  a  card  in  the  cash  drawer 
marked  "Cash  Excess"  and  the  date  and  amount,  or  "Cash  Deficiency"  and  the  date  and  amount, 
as  the  case  may  be;  and  then  allow  for  the  excess  or  deficiency  in  proving  the  cash  on  succeeding 
days.  If  there  is  an  excess,  it  may  be  cleared  up  the  next  time  you  send  out  your  statements  by 
one  of  your  customers  saying  that  your  statement  is  incorrect, — that  he  paid  you  such  an  amount, 
naming  the  amount  of  your  excess,  on  such  a  date,  and  he  may  even  produce  a  receipt  or  his  can- 
celled check  to  prove  that  he  made  the  payment,  but  you  would  probably  not  require  either  of 
these  proofs  if  the  amount  and  the  time  that  he  claims  to  have  made  payment  agree  with  the 
amount  and  time  of  your  excess  of  cash.  If,  on  the  other  hand,  there  is  a  deficiency,  be  very  sure 
that  you,  personally,  are  not  responsible  for  it,  and  be  more  careful  in  the  future  in  making  change, 
in  counting  money  you  pay  out,  and  in  seeing  that  no  payment  goes  out  without  an  entry  first 
having  been  made  for  it. 

If  the  reason  for  the  excess  or  the  deficiency  is  not  discovered  within  a  few  days,  cash  may  be 
debited  for  the  amount  of  the  excess,  with  the  explanation  "Excess  cash,"  and  the  date  of  the 
excess,  or  if  it  is  a  deficiency,  cash  may  be  credited  for  the  amount  of  the  deficiency,  with  the  ex- 
planation "Cash  Deficiency"  and  the  date  of  the  deficiency.  Such  a  Cash  Book  entry  would  be 
posted  to  the  "Excess  and  Deficiency"  account  in  the  Ledger,  about  which  you  will  learn  a  few 
days  later.  If,  at  any  time,  the  reason  for  a  previous  excess  or  deficiency  entered  in  the  Cash 
Book  is  discovered,  an  entry  in  accordance  with  the  real  facts  in  the  case  should  be  made  in  the 
Journal  with  a  complete  explanation  of  the  occurrence.  For  instance,  suppose  that  on  the  15th 
instant  Jones  paid  us  $75  on  account  but  we  transposed  the  figures  and  charged  Cash  and  credited 
him  with  only  $57.  This  threw  our  cash  out— there  was  an  "excess"  or  "over"  of  $18  when  we 
proved  the  cash  for  the  day.  Not  being  able  to  locate  the  "over,"  we  debited  Cash  and  credited 
the  "Excess  &  Deficiency"  account.  At  the  end  of  the  month  we  sent  a  statement  to  each  of  our 
customers.    The  statement  we  sent  to  Jones  was  returned  to  us  by  him  with  a  complaint  that  he 


16        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE. 

had  received  a  credit  of  only  $57  for  a  $75  payment  made  to  us  on  the  15th.  Now  to  correct  mat- 
ters, bearing  in  mind  that  the  Cash  Book  has  already  been  corrected,  we  must  make  a  Journal  entry 
to  correct  Jones'  account  and  the  "Excess  and  Deficiency"  account.  The  proper  Journal  entry 
in  the  above  case  would  be  one  in  which  "Excess  and  Deficiency"  would  be  debited  and  Jones 
would  be  credited  with  $18.  The  explanation  column  should  contain  a  clear  statement  of  the 
facts  in  the  case. 

A  bookkeeper  is  not  apt  to  have  an  "Excess"  or  a  "Deficiency"  for  which  he  cannot  account, 
very  many  times,  without  his  employer's  reaching  the  conclusion  that  he  needs  a  more  accurate 
bookkeeper. 

CHECKS. 

14.  A  check  is  a  written  order  to  a  bank  in  which  the  bank  is  directed  by  the  maker  of  the 
check  to  pay  out  of  the  funds  that  the  maker  of  the  check  has  on  deposit  with  it,  a  definite  sum  to 
the  person  or  to  the  order  of  the  person  named  in  the  check;  or  it  may  direct  the  bank  to  pay  the 
sum  mentioned  to  "Bearer"  or  to  "Cash."  In  order  to  guard  against  paying  money  to  the  wrong 
person,  banks  will  seldom,  or  never,  pay  money  to  any  person  unknown  to  the  bank.  A  stranger 
who  desires  to  get  a  check  in  his  favor  cashed  at  the  bank  on  which  it  is  drawn,  must  either  get 
some  person  who  is  known  at  the  bank  to  introduce  him  or  else  must  endorse  the  check  and  have 
the  maker  of  the  check  write  under  the  endorsement,  "Endorsement  O.K.,"  or  "Endorsement 
Guaranteed,"  and  sign  his  name.  If  a  bank  pays  money  to  the  wrong  person,  the  bank  must 
stand  the  loss.  This  is  why  a  bank  must  be  absolutely  sure  that  it  is  paying  the  money  to  the 
right  person. 

If  you  wish  to  issue  a  check  that  can  be  collected  by  anyone  without  identification,  make  it 
payable  to  "Bearer,"  but  probably  a  better  plan  is  to  make  it  payable  to  the  order  of  the  person 
whom  you  wish  to  receive  the  money  and  then  O.K.  his  endorsement.  In  this  way,  in  his  endorse- 
ment you  have  his  acknowledgment  of  the  receipt  of  the  money,  which  you  would  not  have  if  a 
check  given  him,  payable  to  bearer,  were  lost  and  cashed  by  some  other  person. 

The  maker  of  a  check  is  the  person  who  signs  the  check.  He  is  called  the  drawer  of  the 
check.  The  payee  is  the  person  to  whom  the  check  is  made  payable.  An  endorser  is  any  person 
through  whose  hands  the  check  has  passed  who  has  endorsed  it.  For  a  specimen  form  of  check 
see  page  17. 

Upon  receiving  a  check  it  is  important  to  have  it  cashed  or  to  deposit  it  in  bank  promptly, 
first,  because  a  check  that  is  good  today  may  possibly  not  be  good  tomorrow.  The  maker  of  the 
check  may  fail  in  business  or  the  bank  on  which  the  check  is  drawn  may  fail.  These  things  do  not 
happen  often  but  they  do  happen  sometimes.  Second,  if  you  have  received  the  check  from  some 
person  other  than  the  maker,  you  cannot  hold  any  endorser  or  the  person  from  whom  you  received 
it  responsible  for  payment,  if  your  inability  to  collect  it  is  due  to  your  negligence  in  not  having 
presented  it  promptly  for  payment.  It  is  better  to  deposit  checks  with  your  bank  for  collection 
the  day  they  are  received  and  never  later  than  the  following  business  day. 

Most  business  houses  have  a  rule, — "No  checks  cashed."  This  will  be  a  good  rule  for  you 
to  adopt.  The  reason  for  this  rule  is, — sometimes  a  careless  person  will  issue  a  check  for  a  larger 
amount  than  he  has  on  deposit  in  the  bank  on  which  the  check  is  drawn  and  if  you  have  cashed 
such  a  check  and  deposited  it  in  your  bank  for  collection,  two  or  three  days  later  it  will  be  brought 
back  to  you  by  a  messenger  from  your  bank  marked  "N.  S„"  (not  sufficient  funds),  and  you  must 
then  pay  your  bank  the  amount  of  the  check  and  try  to  collect  the  amount  from  the  person  for 
whom  you  cashed  the  check,  which  is  often  a  difficult  task.  He  has  usually  spent  the  money  you 
gave  him  for  the  check  and  if  he  hasn't  any  money  in  bank  he  usually  hasn't  any  money  anywhere 
else  and  you  may  have  to  wait  until  he  earns  the  money  or  until  he  can  borrow  it  somewhere,  and 
that  sometimes  is  a  long  time.     You  may  get  the  money  eventually  if  he  is  honest,  but  you  will  b»e 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        17 

inconvenienced  in  the  meantime  by  not  having  the  use  of  the  money.  Again,  sometimes  an  un- 
scrupulous person  will  issue  a  check  on  a  bank  in  which  he  has  no  funds  on  deposit.  In  this  case, 
the  procedure  is  very  similar  to  that  in  the  other  case.  However,  in  addition  to  losing  the  money 
paid  in  cashing  the  check,  you  will  probably  be  called  on  to  pay  from  $1.50  to  $4.50  in  protest  fees. 
Any  person  issuing  a  check  on  a  bank  in  which  he  has  no  funds  on  deposit,  is  apt  to  be  sent  to  jail 
if  caught,  but  that  doesn't  give  you  back  your  money.  The  safest  plan  is, — do  not  cash  checks 
for  strangers.  Do  not  accept  checks  from  strangers  in  payment  for  goods  and  give  change.  If 
you  sell  goods  to  a  stranger  and  accept  a  check  in  payment,  get  the  check  cashed  before  you  de- 
liver the  goods,  or  have  the  check  certified  at  the  bank  on  which  it  is  drawn,  or  get  references  from 
the  customer  and  satisfy  yourself  that  the  man  and  the  check  are  all  right  before  you  part  with 
property  that  has  a  known  value.  It  has  long  been  a  common  custom  with  crooks  to  buy  a  bill 
of  goods  and  to  offer  a  check  for  a  larger  amount  in  settlement  of  the  bill,  in  the  hope  of  being  able 
to  get  the  change  in  cash.  Always  be  on  your  guard  when  a  stranger  offers  you  a  check.  There 
are  probably  very  few  men  who  have  been  in  business  any  considerable  length  of  time  who  have 
not  lost  money  more  than  once  by  cashing  checks  for  persons  with  whom  they  were  at  least  slightly 
acquainted.  You  will  learn  this  lesson.  Will  it  be  from  instruction  or  will  you  learn  it  by  ex- 
perience? If  by  experience,  let  it  be  your  own  money  and  not  the  firm's  money  that  you  use  and 
lose  in  learning  it. 

Check. 


(2^^£ 


9aMm^i^. 


SIGHT  DRAFTS. 

15.  A  Sight  Draft  is  a  written  request  for  the  person  to  whom  the  draft  is  directed  or  on 
whom  it  is  drawn,  to  pay  to  the  order  of  the  person  who  issues  the  draft  or  to  the  order  of  some 
other  person  named  in  the  draft,  a  definite  sum  of  money.  The  person  who  draws  or  issues  the 
draft  is  called  the  DRAWER.  The  person  on  whom  the  draft  is  drawn,  that  is  the  person  who  is 
to  pay  the  draft,  is  called  the  DRAWEE,  and  the  person  to  whom  the  draft  is  to  be  paid,  is  called 
the  PAYEE.  Drafts  are  usually  drawn  by  persons  to  whom  money  is  owed,  on  persons  (customers) 
who  owe  the  money,  and  are  usually  made  payable  to  the  order  of  the  person  drawing  the  draft, 
or  to  the  order  of  some  person  to  whom  the  drawer  of  the  draft  is  indebted. 

For  illustration  of  a  sight  draft  see  page  18. 

When  you  issue  a  sight  draft  and  leave  same  at  your  bank  for  collection,  unless  you  are  sure 
that  it  will  be  paid,  use  a  form  with  a  perforated  slip  attached,  reading,  "No  protest— Detach 
this  before  presenting."  In  this  way  you  avoid  having  to  pay  protest  fees  in  the  event  of  the  draft 
not  being  honored  or  paid  by  the  person  on  whom  it  is  drawn, — the  Drawee. 


18        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 


Sight  Draft. 

I— —  *  I  '"     I  M   1  *  I "Til 


fc  yj^y^^/^^7^^^^^. 


^^±ZL^1 


<&^< 


BANK  DRAFTS. 

16.  A  Bank  Draft  is  a  written  request  made  by  one  bank  to  some  other  bank  to  pay  a  definite 
sum  of  money  to  the  order  of  the  person  named  in  the  draft  as  Payee.  Banks  draw  drafts  on 
banks  in  other  cities  in  which  they  have  money  on  deposit  and  sell  these  drafts  to  such  of  their 
customers  as  ask  for  them,  at  either  face  value  or  for  only  a  slight  extra  charge.  These  bank 
drafts  constitute  a  good  method  of  sending  money  from  one  city  to  another  as  they  are  accepted 
anywhere  as  the  equivalent  of  cash.  However,  do  not  cash  a  bank  draft  or  any  other  paper  for 
a  stranger.     The  draft  may  be  a  forgery. 

Bank  Draft. 


Third  National  Hank 

•^/^Wv/-.    J2^^^^  •    1/  40058 


IMPORTERS  &  TRADERS'  NATIONAL  BANK, 
NEW    YORK. 


tf"~ 2r~S-  /oo    ,   //'///■//'.), 


POST-OFFICE  MONEY  ORDERS— EXPRESS  MONEY  ORDERS. 

17.    Post-office  Money  Orders  and  Express  Money  Orders  are  similar  to  each  other  and  are 
both  quite  similar  to  bank  drafts.     In  the  case  of  Post-office  Money  Orders,  a  person  wishing  to 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        19 

transmit  money  from  where  he  is  to  any  other  part  of  the  world,  can  go  into  the  nearest  Money 
Order  Post-office  and  pay  the  money  he  wishes  to  transmit,  together  with  a  small  extra  fee,  and 
receive  in  return  an  Order  for  the  Money  Order  Post-office  nearest  to  the  point  to  which  he  de- 
sires to  send  the  money,  to  pay  the  money  to  the  person  to  whom  the  sender  wishes  it  paid.  The 
person  who  wishes  to  send  the  payment,  mails  the  Post-office  Money  Order  to  the  person  to  whom 
he  desires  to  pay  the  money  and  the  person  receiving  the  Money  Order  can  get  it  cashed  at  the 
Office  upon  which  it  is  drawn,  upon  presenting  it  and  being  properly  identified,  or  he  may  deposit 
it  in  bank  as  cash  and  realize  on  it  in  that  way. 

Express  Money  Orders  are  just  like  Post-office  Money  Orders  except  that  instead  of  being 
issued  by  the  Post-office  Department  and  purchased  at  Money  Order  Post-offices,  they  are  issued 
by  Express  Companies  and  are  purchased  and  cashed  at  the  offices  of  the  Express  Companies. 

In  the  case  of  either  a  Post-office  Money  Order  or  an  Express  Money  Order,  the  purchaser 
should  retain  the  receipt  issued  to  him  until  he  learns  of  the  receipt  of  the  remittance  by  the  per- 
son to  whom  it  is  sent  so  that  he  can  easily  recover  the  amount  of  the  remittance  in  the  event  of 
the  money  order  miscarrying  or  being  lost  in  any  way. 

Express  Money  Order. 


;   TheSuMOF. 


When  Countersigned  i^l^^KKiui'iq^i^Hi^  i]      371179  .-371179 


Br  AGENT  AT  POINT  OF  ISSUE 


"  (|(totelpi^feJj,^#Jttf *% 


Payto  the  order  of_ 


AGREES  TO  TRANSMIT  AND 
^     (1  tfa 


DC!'   f.MS 


'00 


£&~ 


y 


NOT GOOOFTJR  MORE THANTME  HIGHEST  MINTED  MARGINAL  AMOUNT.     IN  NO  CASE  TO  EXCEEO  FIFTY  DOLLARS. 


nrsDOLLARS 


^'5ta£o*^&£  '  „AME  OF  Hm^f 


Issued  at 


^<^fy 


-19    _ 


i;.S.EX£0. 
MONEY  ORDER. 

REMITTER'S  RECEIPT. 
KEEP  IT. 


Af**-ERA5URE,ALTERATtON.DEFACEMENT  ORMUTILATION  OF  THIS  ORDER  RENDERS  IT  VOID. 


£?y.  '-/9-^Cif-U^ ' 


BLANK 5PACCSAREFOR 


HIS  SIGNATURE  iN  INK  WILL 
PREVENT  FMAUDULENT  F»C- 
TUNO  SHOULD  TVIS  RECEIPT 
Be  LOST. 


OPENING  A  BANK  ACCOUNT. 

18.  In  opening  a  bank  account,  it  is  desirable,  if  possible,  to  be  introduced  to  the  Cashier  or 
to  whatever  official  of  the  bank  attends  to  receiving  the  new  customers  of  the  bank,  by  someone 
who  is  known  to  and  who  is  well  thought  of  by  the  bank.  First  impressions  are  often  lasting  and 
since  "Birds  of  a  feather  fly  together,"  if  you  are  introduced  by  a  solid,  conservative  business  man, 
you  presumably  belong  to  that  class  yourself.  To  most  business  men,  because  of  the  need  of 
credit,  it  is  a  matter  of  prime  importance  to  be  thought  well  of  at  the  bank. 

It  is  good  business  practice  to  keep  most  of  your  money  in  bank.  Doing  this  will  not  only 
protect  you  from  the  danger  of  losing  large  sums  of  money  through  burglary,  but  will  also  make  it 
easier  for  you  to  borrow  money  from  the  bank  if  you  should  have  occasion  to  do  so,  since  banks 
will  usually  loan  a  responsible  depositer  four  or  five  times  the  amount  of  his  average  daily  balance. 
In  all  of  your  work  as  a  bookkeeper,  if  you  have  charge  of  the  cash,  make  a  deposit  daily  and  re- 
tain in  the  cash  drawer  or  safe  only  enough  money  to  enable  you  to  make  change  and  to  pay  the 
small  bills  that  you  do  not  wish  to  pay  by  check  and  never  keep  out  of  bank  an  amount  in  excess 
of  One  Hundred  Dollars  unless  you  have  some  specific  use  for  it  before  the  next  banking  day. 


20        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

Banks  are  usually  glad  to  receive  new  customers  even  though  their  accounts  may  be  small 
at  the  beginning.  The  smallest  amount  the  bank  will  receive  as  one's  first  deposit  and  the  small- 
est daily  balance  that  is  considered  satisfactory,  differs  at  different  banks.  Probably  an  initial 
deposit  of  Two  Hundred  Dollars  and  a  daily  balance  of  not  less  than  One  Hundred  Dollars  would 
be  acceptable  to  the  majority  of  banks.  » 

When  you  are  ready  to  make  your  first  deposit  in  the  College  Bank,  ask  your  teacher  to  in- 
troduce you  at  the  bank.  When  you  have  been  introduced,  the  bank  official  who  receives  you  will 
have  you  sign  a  signature  card  which  will  be  placed  on  file  in  the  bank  so  that  the  signature  to 
your  checks  can  be  verified  or  compared  to  avoid  the  danger  of  the  bank  paying  out  your  money 
on  a  check  made  and  signed  by  some  other  person  but  purporting  to  be  signed  by  you,  in  other 
words,  to  avoid  the  danger  of  the  bank  paying  out  your  money  on  a  forged  check.  In  signing  the 
signature  card,  sign  your  name  just  as  you  will  write  it  in  signing  your  checks.  I  heard  of  a  case 
in  which  a  student's  penmanship  improved  so  much  while  he  was  taking  a  business  course  that  a 
bank  in  which  he  had  deposited  money  before  beginning  his  course,  refused  to  honor  his  check 
until  he  produced  other  means  of  identification.  There  will  be  reason  for  gratification  if  your 
penmanship  improves  to  that  extent  during  your  course. 

The  bank  will  furnish  you  deposit  slips,  a  bank  pass  book  and  a  check  book  without  charge. 
Ask  the  Receiving  Teller  for  additional  deposit  slips  and  for  another  check  book  when  you  need 
them. 

Bank  Pass  Book. 


r 

THIRD  NATIONAL   BANK, 

BALTIMORE,  MD, 
X3R.                                                           In  account  with 

r 

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MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        21 


Deposit  Ticket. 


THIRD  N  AIJGHAfc . 

<i\altimnre  jL^^/ZJ  1H  j_ 

££tw  theJVames-  ^of  'Places  on  which  Oiec/rs 
are-  dranvv  atid,  natnes  of '  fityJJojtAs. 


Specie 


DOLl^ARS 


19.  Instead  of  keeping  an  account  with  the 
bank  in  the  Ledger,  most  persons  simply  keep  a 
record  of  the  amount  in  bank  on  the  back  of  the 
check  book  stubs.  To  do  this,  enter  on  the  back 
of  the  first  stub  the  amount  of  the  original  deposit 
and  add  any  additional  deposits  that  are  made. 
The  total  of  each  deposit  may  be  added  or  the 
various  items  of  the  deposit  may  be  listed  and 
added,  according  to  the  wishes  of  the  man  in  charge. 
Subtract  daily  the  sum  of  all  of  the  checks  that  have 
been  issued  during  the  day. 

20.  You  should  have  your  bank  book  balanced 
every  month  by  the  bank  and  when  the  bank  book- 
keeper hands  you  your  balanced  bank  book,  your 
cancelled  checks  (the  checks  that  have  been  paid 
by  the  bank),  and  an  adding  machine  list  of  them, 
you  should  see  whether  or  not  your  bank  balance 
according  to  your  own  record  agrees  with  the  bal- 
ance as  shown  by  the  bank.  To  do  this  you  cannot 
simply  compare  the  balance  as  shown  in  your  bank 
book  by  the  bank  bookkeeper  and  your  balance  as 
shown  on  your  check  book  stub,  because  almost  al 
ways  there  are  outstanding  checks  that  have  been 
issued  but  that  have  not  yet  been  presented  to  the 

bank  for  payment,  which  must  be  taken  into  consideration.  Listing  these  outstanding  checks  and 
showing  that  when  they  are  allowed  for,  the  bank  balance  as  shown  by  the  bank  and  as  shown  by 
your  record  on  the  check  book  stub,  agree,  constitutes  the  reconciliation  of  the  bank  balance.  Of 
course  you  should  make  your  reconciliation  as  of  the  same  date  as  that  on  which  the  bank  balanced 
the  account, — should  use  the  balance  as  shown  on  your  check  book  stub  on  that  date  and  should  not 
take  into  consideration  any  outstanding  checks  issued  after  that  time.  By  arranging  all  of  the 
checks  returned  by  the  bank  in  order  according  to  their  numbers,  it  will  be  easy  to  see  just  which 
checks  are  missing,  and  which  checks  therefore  have  not  yet  been  paid  by  the  bank,  and  by  con- 
sulting the  stubs  for  the  missing  checks  you  will  readily  get  the  amount  of  each  of  them.  Use  a 
form  similar  to  that  in  the  illustration. 

If,  by  any  chance,  the  amount  gotten 
by  this  process  does  not  agree  with  the 
balance  shown  in  your  bank  pass  book 
by  the  bank  bookkeeper,  go  over  all 
of  the  work  in  your  check  book  until 
you  find  your  error.  Perhaps  you  have 
made  an  error  in  setting  down  or  add- 
ing some  deposit  or  perhaps  you  have 
failed  to  subtract  some  check,  or  have 
made  a  mistake  in  subtracting  or  in  for- 
warding some  balance  from  stub  to  stub. 
You  should  make  it  a  rule  to  always  fill 
in  your  check  book  stub  before  writing  a 
check.  Find  your  error,  whatever  it  is, 
and  on  the  stub  where  it  is  found,  note  in 
red  ink  "Corrected  after  check  No. — ", 
and  where  the  correction  is  made,  note  in  red  ink,  "  Correction  of  error  made  after  check  No.  — ". 


k2^^S>?*^--£^2-^  c^c^^.    /.,   S^ 


/**■/&. 7  6 


Sf    7// 

7J2.0 

7:2,/ 


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^<?-7. 


^&.J'l 


22        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

CARE  IN  WRITING  CHECKS. 

21.  In  writing  a  check  or  other  similar  business  paper,  begin  the  first  word  representing  the 
number  of  dollars  at  the  extreme  left  of  the  line  ending  with  the  word  "Dollars,"  and  fill  any  space 
between  the  words  representing  the  number  of  dollars  and  the  word  "Dollars"  with  a  waved  line. 
Write  the  figures  representing  the  number  of  dollars  up  close  to  the  dollar  mark.  Care  in  the 
above  matters  helps  to  remove. the  temptation,  to  any  unscrupulous  person  through  whose  hands 
a  check  may  pass,  to  try  to  raise  it — to  increase  the  amount  for  which  it  is  written.  Nowadays, 
nearly  everybody  uses  a  check  protector  of  one  kind  or  another  as  a  safeguard  against  checks  be- 
ing raised.     The  Protectograph  Check  Writer  is  one  of  the  most  popular  devices  of  this  kind. 

ENDORSEMENTS. 


22.  An  endorsement  is  the  writing  of  one's  name  with  or  without  other  words  on  the  back  of 
a  check  or  other  negotiable  paper.  A  person  who  endorses  a  check  or  other  paper,  by  doing  so 
becomes  responsible  to  all  of  the  persons  who  receive  it  after  him  for  the  payment  of  the  paper, 
— that  is  if  the  maker  of  the  paper  fails  to  pay  it,  any  person  who  has  received  it  after  you  have 
endorsed  it,  can  compel  you  to  pay  it  after  he  has  had  the  paper  protested,  unless  you  have 
endorsed  it  "Without  Recourse."  This  special  endorsement  would  probably  result,  however,  in  your 
keeping  the  paper,  for  most  business  men  would  refuse  to  accept  paper  which  you  are  unwilling 
to  guarantee  with  a  proper  and  regular  endorsement. 

The  two  forms  of  endorsement  in  most  common  use  are  Endorsement  in  Blank  and  Endorse- 
ment in  Full. 

23.  Endorsement  in  Blank  consists  of  the  payee  or  holder  simply  writing  his  name  across 
the  back  of  the  paper  endorsed.  This  is  not  a  desirable  form  of  endorsement  because  a  paper  so 
endorsed  is  in  fact  payable  to  bearer  regardless  of  how  he  gained  possession  of  it.  A  person  re- 
ceiving a  paper  endorsed  in  blank,  may,  if  he  chooses,  write  above  the  endorsement  "Pay  to  the 
order  of"  and  his  own  name,  thus  making  the  paper  carry  a  full  endorsement. 

24.  Endorsement  in  Full  consists  of  writing  "Pay  to  the  Order  of"  and  the  name  of  the  per- 
son to  whom  the  paper  is  to  be  transferred,  above  the  signature  of  the  payee  or  holder.  This  is 
the  best  form  of  endorsement  for  general  use,  because  if  a  paper  bearing  a  full  endorsement  is  lost 
or  stolen,  it  is  of  no  use  to  the  finder  or  thief  because  it  cannot  be  cashed  without  the  endorsement  of 
the  person  to  whom  the  previous  endorser  has  made  it  payable.  Always  endorse  papers  in  full 
unless  there  is  some  case  in  which  there  is  some  specific  reason  for  not  doing  so. 


Endorsement  in  full. 


Endorsement  in  blank. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE.        23 

25.  To  lessen  the  work  of  making  up  deposits  for  the  bank,  many  persons  use  a  rubber  stamp 
containing  an  endorsement  in  full  in  favor  of  the  bank  in  which  the  deposit  is  to  be  made.  In 
this  case  even  the  signature  of  the  endorser  may  be  a  part  of  the  rubber  stamp  since,  inasmuch  as 
the  proceeds  are  simply  to  be  placed  to  the  credit  of  the  endorser  in  the  bank  to  the  order  of  which 
he  makes  the  check  payable,  no  one  will  ever  question  the  validity  of  the  signature.  The  rubber 
stamp  signature  should  be  simply  the  name  of  the  depositor  in  type  and  not  a  fac-smile  signature. 
Formerly  a  rubber  stamp  containing  the  words  "For  deposit"  or  "For  collection"  and  the  name  of 
the  depositor  was  used  to  a  considerable  extent  in  making  up  bank  deposits,  but  such  an  endorse- 
ment is  a  restrictive  endorsement  and  is  therefore  objected  to  by  some  banks,  and  for  that  reason 
is  not  now  considered  good  business  practice.  You  will  learn  more  about  restrictive  endorsements 
and  will  learn  about  qualified  endorsements  and  conditional  endorsements  through  your  study  of 
Commercial  Law. 

26.  If  ever  you  receive  a  check  or  other  paper  payable  to  yourself,  with  the  initials  wrong  or 
your  name  spelled  incorrectly,  in  endorsing  it,  first  write  your  name  just  as  it  appears  on  the  paper 
and  immediately  under  that,  write  your  name  correctly. 

27.  An  endorsement  on  a  check  should  be  written  on  the  back  of  the  check  about  one  inch 
from  the  left  end  of  the  check.  The  endorsement  of  all  checks  in  this  uniform  manner  facilitates 
the  handling  of  them  by  the  banks  through  which  they  pass  and  indicates  a  knowledge  of  good 
business  form.     For  illustration,  see  page  22. 

RECEIPTS. 

28.  Always  get  a  proper  receipt  for  every  payment  you  make  in  money,  so  that  if  it  should 
ever  be  necessary,  you  can  prove  that  you  have  made  the  payment,  and  always  give  a  proper  re- 
ceipt for  every  payment  you  receive  in  money  so  that  if  it  should  ever  be  necessary,  the  person  who 
made  the  payment  to  you  can  prove  that  he  made  it;  or  if  any  person  claims  to  have  made  a  pay- 
ment to  you  which  your  books  do  not  show,  you  can  reasonably  ask  him  to  produce  his  receipt. 
File  and  preserve  your  receipts.  It  is  not  important  to  get  receipts  for  payments  made  by  check 
because  the  checks  returned  to  you  by  your  bank  are  evidence  that  you  have  made  the  payments 
and  they  should  be  filed  and  preserved  as,  receipts,  after  they  have  served  their  purpose  in  your 
reconciliation  of  your  check  book  balance  with  the  pass  book  balance  figured  by  the  bank.  Re- 
ceipts should  always  be  dated  and  in  addition  to  the  name  and  amount  received,  should  have  some 
explanation,  such  as  "On  account,"  "In  full,"  "To  date"  or  the  name  or  a  description  of  the  article 
for  which  payment  is  made.  The  date  of  the  bill  paid  is  also  a  good  explanation.  If  the  payment 
is  made  by  check  or  by  note,  it  is  good  form  to  mention  that  fact  in  the  receipt  so  that  if  the  check 
or  note  should  turn  out  to  be  worthless,  the  receipt  would  be  null  and  void. 

Receipt. 


>^S 


^^^^^^^^^^^-^^^^X^ 


24        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

PERSONAL  ACCOUNTS. 

29.  Personal  accounts  are  kept  in  the  Ledger  with  persons  who  owe  us,  and  with  persons 
whom  we  owe,  to  show  how  much  other  persons  owe  us  and  how  much  we  owe  other  persons.  Ac- 
cordingly, whenever  another  person  (meaning  either  a  person,  firm,  company  or  corporation) 
gets  in  debt  to  us,  or  whenever  we  get  in  debt  to  another  person,  we  open  an  account  in  the  Ledger 
with  that  person.     See  illustration  pages  46  to  49. 

WHEN  TO  DEBIT  A  PERSON. 

30.  Whenever  you  give  another  person  anything  without  at  that  time  receiving  something 
in  exchange  for  it,  debit  his  account  for  what  you  give  him.    Debit  the  receiver. 

Commit  the  above  rule  to  memory. 

According  to  the  above  rule — 

If  a  person  owes  you  anything  at  the  time  you  begin  keeping  accounts,  or  when  you  open  a 
set  of  books,  you  should  debit  his  account  at  that  time  for  the  amount  of  his  indebtedness  to  you, 
because  it  represents  what  you  have  already  given  him  without  receiving  anything  in  exchange 
for  it. 

If  you  sell  him  anything  on  account,  you  should  debit  his  account  for  it,  because  you  give 
him  what  you  sell  him  on  account  without  at  that  time  receiving  anything  in  exchange  for  it. 

If  you  work  for  him  without  receiving  immediate  payment,  you  should  debit  his  account  for 
the  amount  of  your  bill,  because  you  give  him  the  work  without  at  that  time  receiving  anything  in 
exchange  for  it. 

If  you  loan  him  any  money  on  account,  you  should  debit  his  account  for  the  amount  you  loan 
him  because  you  give  him  the  money  without  at  that  time  receiving  anything  in  exchange  for  it. 

If  you  owe  him  money,  and  give  or  send  him  payment  in  full  or  in  part,  (either  in  cash,  by 
check,  money  order  or  bank  draft,  or  if  you  pay  his  draft  on  you  at  sight,  on  demand,  or  at  1, 
3  or  5  day's  sight)  you  should  debit  his  account  for  the  amount  of  the  payment,  because  you  give 
him  that  amount  without  at  that  time  receiving  anything  in  exchange  for  it. 

If  you  give  him  your  note  or  accept  his  time  draft  on  you,  you  should  debit  his  account  for  the 
amount  of  the  draft  or  note,  because  you  give  that  to  him  without  at  that  time  receiving  anything 
in  exchange  for  it. 

If  you  return  goods  to  him  with  which  his  account  has  been  credited,  you  should  debit  his 
account  for  them,  because  you  give  them  to  him  without  at  that  time  receiving  anything  in  ex- 
change for  them. 

If  there  is  any  other  transaction  in  which  you  give  another  person  anything  without  at  that 
time  receiving  something  in  exchange  for  it,  you  should  debit  his  account  for  what  you  give  him. 

WHEN  TO  CREDIT  A  PERSON. 

31.  Whenever  another  person  gives  you  anything  without  at  that  time  getting  something  in 
exchange  for  it,  credit  his  account  for  what  he  gives  you.    Credit  the  giver. 

Commit  the  above  rule  to  memory. 

According  to  the  above  rule — 

If  you  owe  a  person  anything  at  the  time  you  begin  keeping  accounts,  or  when  you  open  a 
set  of  books,  you  should  credit  his  account  at  that  time  for  the  amount  of  your  indebtedness  to 
him,  because  it  represents  what  he  has  already  given  you  without  getting  anything  in  exchange  for 
it. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        25 

If  you  buy  anything  from  him  on  account,  you  should  credit  his  account  for  the  amount  of 
the  bill,  because  he  gives  you  what  he  sells  you  on  account  without  at  that  time  getting  anything 
in  exchange  for  it. 

If  he  does  work  for  you  without  receiving  immediate  payment,  you  should  credit  his  account 
with  the  amount  of  his  bill,  because  he  gives  you  the  work  without  at  that  time  getting  anything 
in  exchange  for  it. 

If  he  loans  you  money  on  account,  you  should  credit  his  account  with  the  amount  he  loans 
you  because  he  gives  you  the  money  without  at  that  time  getting  anything  in  exchange  for  it. 

If  he  owes  you  money  and  gives  or  sends  you  payment  in  full  or  in  part,  (either  in  cash, 
money  order  or  bank  draft,  or  if  he  pays  your  draft  on  him  at  sight,  on  demand,  or  at  1,  3  or  5 
day's  sight),  you  should  credit  his  account  with  the  amount  of  the  payment,  because  he  gives  you 
that  without  at  that  time  getting  anything  in  exchange  for  it. 

If  he  gives  you  his  note  or  accepts  your  time  draft  on  him,  you  should  credit  his  account  with 
the  amount  of  the  note  or  draft,  because  he  gives  you  that  without  at  that  time  getting  anything 
in  exchange  for  it. 

If  he  returns  to  you  goods  with  which  his  account  has  been  debited,  you  should  credit  his 
account  with  them,  because  he  gives  them  to  you  without  at  that  time  getting  anything  in  ex- 
change for  them. 

If  there  is  any  other  transaction  in  which  another  person  gives  you  anything,  without  at  that 
time  getting  something  in  exchange  for  it,  you  should  credit  his  account  with  what  he  gives  you. 

32.  If  the  rules  given  in  articles  30  and  31  are  followed,  the  amount  that  the  debit  side  of  any 
personal  account  is  larger  than  the  credit  side,  will  be  the  amount  that  the  person  with  whom  the 
account  is  kept,  owes  us,  and  the  amount  that  the  credit  side  of  any  personal  account  is  larger  than 
the  debit  side,  will  be  the  amount  that  we  owe  the  person  with  whom  the  account  is  kept.  See 
illustration  pages  46  to  49  and  tell  which  persons  we  owe  and  which  persons  owe  us,  and  in  each 
case,  how  much. 

PROPERTY  AND  EXPENSE  ACCOUNTS. 

33.  In  all  businesses,  a  number  of  accounts  known  as  Property  Accounts  and  Expense 
Accounts  are  kept  for  the  sake  of  the  information  they  supply.  In  some  sets  of  books  there  are 
but  few  such  accounts  kept;  in  others,  there  are  many,  the  number  depending  upon  the  nature 
of  the  business,  the  minuteness  with  which  the  proprietor  of  the  business  wishes  to  classify  his 
expenses  and  his  sources  of  income,  and  upon  the  number  of  details  in  connection  with  the  business 
about  which  he  considers  it  desirable  to  have  specific  information.  Three  of  the  most  common 
among  Property  and  Expense  Accounts  are, — the  Merchandise  account,  the  Store  &  Office  Fix- 
tures account,  and  the  Expense  account. 

WHEN  TO  DEBIT  AND  WHEN  TO  CREDIT  PROPERTY  AND  EXPENSE  ACCOUNTS 

34.  Debit  Property  and  Expense  accounts  whenever  those  things  for  which  they  stand, 
cost  you  anything — whenever  you  buy  those  things — whenever  they  are  an  expense  to  you. 
Credit  Property  and  Expense  accounts  whenever  you  receive  anything  from  those  things  for  which 
they  stand — whenever  you  sell  those  things — whenever  they  are  a  source  of  income.  Debit  what 
is  received.  Credit  what  is  given.  You  will  remember  that  when  you  receive  cash,  you  debit 
cash,  and  that  when  you  give  out  cash,  you  credit  cash.  The  same  rule  holds  good  for  every 
thing  else.  If  you  buy  merchandise,  you  receive  merchandise,  and  you  debit  the  merchandise 
account.  If  you  buy  store  and  office  fixtures,  you  receive  store  and  office  fixtures,  and  you  debit 
the  store  and  office  fixtures  account.  If  you  buy  expense  items,  you  receive  the  expense  items, 
and  you  debit  the  expense  account.  On  the  other  hand,  if  you  sell  merchandise,  you  give  out 
merchandise,  and  you  credit  the  merchandise  account.  If  you  sell  store  and  office  fixtures,  you 
give  out  store  and  office  fixtures,  and  you  credit  the  store  and  office  fixtures  account.  If  you  sell 
expense  items,  you  give  out  expense  items,  and  you  credit  the  expense  account.  Always,  you 
debit  what  you  receive  and  credit  what  you  give. 


26        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

THE  MERCHANDISE  ACCOUNT. 

35.  Merchandise  is  the  general  term  applied  to  the  goods  in  which  we  deal.  The  Merchan- 
dise account  is  kept  to  show  what  we  pay  for  merchandise  and  what  we  receive  for  it,  and  thus 
whether  we  lose  or  gain  on  it. 

According  to  article  34,  we  would  debit  the  Merchandise  account  when  we  begin  business, 
or  open  our  books,  for  whatever  merchandise  we  then  have  on  hand,  because  it  has  cost  us  some- 
thing. We  have  received  merchandise.  From  that  tim<i  on,  we  would  debit  the  Merchandise 
account  for  all  merchandise  we  buy  because  it  costs  us  something.     We  receive  merchandise. 

We  would  credit  the  Merchandise  account  for  all  the  merchandise  we  sell,  because  we  receive 
something  for  it.     We  give  out  merchandise. 

We  would  credit  the  Merchandise  account  for  all  merchandise  we  return  to  other  persons 
after  we  have  bought  it,  because  we  will  receive  something  for  it,  just  as  though  we  had  sold  it. 
We  give  out  merchandise. 

We  Debit  the  Merchandise  account  for  all  merchandise  coming  into  our  store, — received. 

We  Credit  the  Merchandise  account  for  all  merchandise  going  out  of  our  store, — given  out. 

36.  Whenever  we  desire  to  ascertain  whether  we  have  gained  or  lost  on  our  Merchandise 
account,  we  add  all  of  the  debits  to  the  account  which  represent  what  the  merchandise  has  cost  us; 
then  take  the  value  of  the  merchandise  still  on  hand  and  make  an  entry  for  that  amount  on  the 
credit  side  of  the  Merchandise  account,  with  the  explanation  "Inventory,"  and  then  add  all  the 
credits  to  the  account,  which  represent  what  the  merchandise  has  brought  us  or  is  worth  to  us. 
If  the  total  of  the  debit  side  of  the  account  is  larger,  our  merchandise  has  cost  us  more  than  it  has 
brought  us  or  is  worth  to  us,  and  we  have  lost  on  it  the  amount  that  the  total  of  the  debits  exceeds 
the  total  of  the  credits,  but  if  the  total  of  the  credit  side  of  the  account  is  the  larger,  our  merchan- 
dise has  brought  us,  or  is  worth  to  us,  more  than  it  cost  us,  and  we  have  gained  on  it  the  amount 
that  the  total  of  the  credits  exceeds  the  total  of  the  debits. 

For  an  illustration  of  a  Merchandise  account,  see  page  45. 

Whenever  we  desire  to  know  whether  we  have  gained  or  lost  on  any  other  Property  or  Ex- 
pense account,  we  find  out  by  the  same  method  as  the  one  described  for  use  in  the  Merchandise 
account. 

STORE  AND  OFFICE  FDCTURES  ACCOUNT. 

37.  The  Store  and  Office  Fixtures  account  is  kept  to  show  what  it  cost  us  to  fit  up  our  store 
and  office,  and  how  much  we  lose  on  the  furniture  and  fixtures. 

According  to  article  34,  we  would  debit  the  Store  and  Office  Fixtures  account  when  we  begin 
business,  or  open  our  books,  for  whatever  store  and  office  fixtures  we  have  on  hand  at  that  time, 
because  they  have  cost  us  something.     We  have  received  Store  and  Office  Fixtures. 

We  would  debit  the  Store  and  Office  Fixtures  account  for  any  additional  furniture  or  fixtures 
we  buy  for  the  store  or  office,  because  they  cost  us  something.  We  receive  Store  and  Office 
Fixtures. 

We  would  credit  the  Store  and  Office  Fixtures  account  for  anything  we  sell  for  which  we 
debited  this  account  at  the  opening  of  the  books,  or  when  we  bought  it,  because  we  receive  some- 
thing for  it.     We  give  out  Store  and  Office  Fixtures. 

The  things  included  under  the  heading  Store  and  Office  Fixtures,  and  accordingly  charged 
to  that  account,  will  differ  widely  in  different  businesses,  since  anything  that  is  needed  in  the  line 
of  fixtures  and  furniture  to  fit  up  the  building  ready  for  the  particular  line  of  business  in  which  we 
intend  to  engage,  properly  belongs  to  that  account.  Some  of  the  more  common  articles  coming 
under  this  heading  are — counters,  shelves,  show-cases,  desks,  safes,  typewriters,  chairs,  scales, 
calculating  machines,  duplicating  machines,  etc, 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        27 

Some  firms  charge  teams,  wagons  and  automobiles  to  this  account,  but  perhaps  more  keep 
a  Teams  and  Wagons  or  Motor  Trucks  account,  which  is  preferable,  especially  if  several  horses 
and  wagons  or  automobiles  are  kept.  If  a  Teams  and  Wagons  account  or  an  Automobile  account 
is  kept,  it  should  be  kept  in  just  the  same  way  as  the  Store  and  Office  Fixtures  account. 

For  an  illustration  of  a  Store  and  Office  Fixtures  account,  see  page  45. 

THE  EXPENSE  ACCOUNT. 

38.  The  Expense  account  is  kept  to  show  the  amount  of  the  expenses  in  connection  with 
running  our  business. 

According  to  Article  34,  we  would  debit  the  Expense  account  whenever  we  were  at  any  ex- 
pense in  connection  with  the  running  of  the  business  unless  we  had  some  other  account  in  our 
Ledger  to  which  the  expenditure  could  more  properly  be  debited.  If  we  had  no  accounts  of  the 
class  we  are  now  studying  about,  in  our  Ledger,  except  the  Merchandise  account,  the  Store  and 
Office  Fixtures  account  and  the  Expense  account,  we  would  debit  the  Merchandise  account  when- 
ever we  bought  goods  to  sell  again,  and  would  debit  the  Store  and  Office  Fixtures  account  when- 
ever we  bought  furniture,  fixtures,  or  appliances  of  any  kind  to  be  used  as  part  of  the  equipment  of 
our  establishment,  and  we  would  debit  the  Expense  account  for  all  other  expenses,  such  as  rent, 
clerk  hire,  salaries,  advertising,  fuel  and  light,  insurance,  interest,  freight  and  express  charges, 
drayage,  taxes,  stationery,  stamps,  repairs,  etc.,  etc. 

In  nearly  all  large  businesses,  separate  accounts  are  kept  for  many  of  the  things  just  enumer- 
ated, and  when  this  is  done,  each  account  of  this  kind  is  kept  just  like  the  Expense  account,  being 
debited  for  whatever  the  things  properly  coming  under  it  cost,  and  credited  if  we  should  ever 
receive  anything  for  them,  and  then  the  Expense  account  includes  all  expenses  which  do  not  come 
under  some  other  particular  account. 

Even  where  separate  accounts  are  kept  for  most  items  of  expense,  there  are  always  a  number 
of  expenses  which  do  not  properly  come  under  any  of  the  classified  heads,  and  these  are  grouped 
in  the  regular  Expense  account,  which  is  often  in  this  case  called  General  Expense. 

The  Expense  account  is  credited  if  we  should  chance  to  sell  or  receive  anything  for  Things 
which  were  debited  to  the  Expense  account  when  received. 

For  an  illustration  of  an  Expense  account,  see  page  46. 

WRITTEN  TEST  NO.  2. 

1.  In  what  book  are  Personal  accounts  kept? 

2.  What  are  Personal  accounts  kept  for? 

3.  Which  is  the  debit  side  of  every  Personal  account? 

4.  Which  is  the  credit  side  of  every  Personal  account? 

5.  Will  the  same  rule  as  to  which  is  the  debit  side  and  which  is  the  credit  side  hold  good  for 
all  other  accounts  or  not? 

6.  Name  every  kind  of  a  transaction  that  you  can  think  of  which  would  require  you  to  debit 
the  account  of  any  person  with  whom  you  might  be  keeping  an  account.  Every  kind  that  would 
require  you  to  credit  the  account  of  the  person. 

7.  If  another  person  owes  you  (meaning  the  firm  for  whom  you  keep  the  books)  at  the  time 
you  begin  keeping  accounts,  or  when  you  open  a  set  of  books,  should  the  person's  account  be 
debited  or  credited? 

8.  What  is  the  Merchandise  account  kept  for?  The  Store  and  Office  Fixtures  account? 
The  Expense  account? 

9.  What  is- the  general  rule  for  keeping  such  accounts  as  the  Merchandise,  Store  and  Office 
Fixtures,  and  Expense  accounts? 

10.  For  what  would  the  Merchandise  account  be  debited  at  the  time  you  begin  business  or 
when  you  open  a  set  of  books? 


28        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

11.  If  you  buy  merchandise  for  cash,  should  the  Merchandise  account  be  debited  or  credited? 

12.  If  you  sell  merchandise  for  cash,  should  the  Merchandise  account  he  debited  or  credited? 
If  you  sell  merchandise  on  account? 

13.  If  you  return  merchandise  after  it  has  been  purchased  and  entered  on  your  books,  should 
the  Merchandise  account  be  debited  or  credited? 

14.  If  merchandise  is  returned  to  you  after  you  have  sold  it  and  entered  it  on  your  books, 
should  the  Merchandise  account  be  debited  or  credited? 

15.  For  what  should  the  Store  and  Office  Fixtures  account  be  debited  when  you  begin  keep- 
ing accounts  or  open  a  set  of  books? 

16.  Mention  the  circumstances  under  which  you  would  debit  the  Store  and  Office  Fixtures 
account  when  keeping  a  set  of  books.    The  circumstances  under  which  you  would  credit  it. 

17.  What  all  should  be  included  in  the  Store  and  Office  Fixtures  account?  How  about  teams 
and  wagons?    Automobiles  or  automobile  trucks? 

18.  Tell  under  what  circumstances  and  for  what  the  Expense  account  might  properly  be 
debited  at  the  time  a  set  of  books  is  opened. 

19.  After  the  books  have  been  opened,  when  should  the  Expense  account  be  debited? 
When  should  it  be  credited? 

20.  If  separate  accounts  are  kept  for  such  expenses  as  salaries,  rent,  advertising,  freight, 
interest,  etc.,  in  what  way,  if  any,  does  the  keeping  of  such  accounts  differ  from  the  keeping  of  the 
Expense  account?  What  effect  does  the  keeping  of  such  separate  accounts  have  on  the  Expense 
account? 

21.  How  can  the  loss  or  gain  on  the  Merchandise  account  be  ascertained  at  any  time?  On 
the  Store  and  Office  Fixtures  account?  On  the  Expense  account?  On  any  other  Property  or 
Expense  account? 

22.  What  is  an  inventory? 

23.  On  which  side  of  the  account  is  the  inventory  entered  when  you  are  finding  the  loss  or 
p;ain  on  the  Merchandise,  Store  and  Office  Fixtures,  or  Expense  account? 

24.  Which  side  of  a  Property  or  Expense  account  is  the  larger  when  there  is  a  loss  on  it? 
When  there  is  a  gain  on  it? 

25.  If  you  buy  merchandise  or  anything  else  without  paying  for  it,  what  account  should  be 
debited  and  what  account  should  be  credited?  If  you  sell  merchandise  or  anything  else  without 
receiving  payment  for  it,  what  account  should  be  debited  and  what  account  should  be  credited? 

26.  If  another  person  does  work  for  you  without  receiving  payment  for  it,  what  account 
should  be  debited  and  what  account  should  be  credited?  If  you  do  work  for  another  person  with- 
out receiving  payment  for  it,  what  account  should  be  debited  and  what  account  should  be  credited? 

27.  If  other  persons  send  you  remittances  to  apply  on  their  accounts,  what  account  should 
be  debited  and  what  accounts  should  he  credited?  If  you  send  other  persons  remittances  to  apply 
on  account,  what  accounts  should  be  debited  and  what  account  should  be  credited? 

28.  If  you  return  goods  which  are  unsatisfactory,  or  which  are  not  what  you  ordered,  to  the 
person  from  whom  you  purchased  them,  what  account  should  be  debited  and  what  account  should 
be  credited?  If  another  person  returns  goods  to  you  for  similar  reasons,  what  account  should  be 
debited  and  what  account  should  be  credited? 

29.  If  another  person  sends  you  a  note  in  part  payment  or  in  settlement  of  his  account, 
should  his  account  be  debited  or  credited?     If  you  send  another  person  a  note? 

30.  How  can  you  tell  whether  another  person  with  whom  you  have  an  account  owes  you  or 
whether  you  owe  him,  and  in  either  case,  how  much? 

31.  How  do  you  open  an  account  on  your  books  with  another  person,  and  in  which  book  does 
that  account  appear? 

32.  When  should  you  open  an  account  with  another  person? 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS    PRACTICE.        29 

DOUBLE  ENTRY  BOOKKEEPING. 

39.  Double  entry  bookkeeping  is  just  what  the  name  implies,  bookkeeping  with  a  double 
entry — two  entries — (a  debit  and  a  credit)  for  each  business  transaction. 

Whenever  you  debit  any  account,  you  must  credit  some  other  account  (or  accounts)  with 
the  same  amount.  Whenever  you  credit  any  account,  you  must  debit  some  other  account  (or 
accounts)  with  the  same  amount. 

If  you  do  as  above  directed,  the  total  of  all  the  debits  and  the  total  of  all  the  credits  in  the  set 
of  books  will  always  be  equal, — the  books  will  always  balance. 

Whenever  any  thing  of  value  or  any  form  of  value  comes  into  the  business,  debit  the  account 
which  represents  it  on  the  books  and  credit  the  person  from  whom  it  comes  or  the  account  which 
produces  the  value. 

Whenever  any  thing  of  value  or  any  form  of  value  goes  out  of  the  business,  credit  the  account 
which  represents  it  on  the  books  and  debit  the  person  to  whom  it  goes  or  the  account  which  re- 
ceives the  value. 

Commit  the  above  rules  to  memory. 

40.  If  you  are  keeping  a  set  of  books  in  which  the  only  accounts  open  are — the  Cash  account, 
(which  is  kept  in  the  Cash  Book),  the  Proprietors'  Stock  accounts,  the  Merchandise  account,  the 
Store  and  Office  Fixtures  account,  the  Expense  account,  and  the  various  personal  accounts,  all 
of  which,  except  the  Cash  account,  are  kept  in  the  Ledger, — according  to  the  rules  that  you  have 
already  learned,  you  will  debit  the  Cash  account  with  the  amount  of  cash  on  hand  at  the  begin- 
ning of  business,  or  when  the  books  are  opened,  and  that  debit  will  be  balanced  by  crediting  the 
Proprietors'  Stock  accounts  with  the  same  amount,  as  part  or  all  of  their  investments,  as  the  case 
may  be. 

If  there  is  any  merchandise  on  hand,  you  will  debit  the  Merchandise  account  with  the  amount 
of  its  value  as  per  inventory  of  merchandise  and  credit  the  Proprietors'  Stock  accounts  with  the 
same  amount,  thus  balancing  that  debit.  (The  inventory  mentioned  above  is  a  list  of  all  the  dif- 
ferent items  of  merchandise  in  the  stock.  It  shows  the  number  of  units  in  each  item,  the  cost  of 
each  unit  and  the  cost  value  of  the  whole  stock). 

If  there  are  store  and  office  fixtures  on  hand,  you  will  debit  the  Store  and  Office  Fixtures 
account  with  their  value  as  per  inventory  of  fixtures,  and  credit  the  Proprietors'  Stock  accounts 
with  the  same  amount,  which  will  leave  the  books  still  in  balance. 

If  there  are  things  on  hand  which,  if  purchased,  would  be  debited  or  charged  to  the  Expense 
account,  you  will  debit  the  Expense  account  with  them  as  per  inventory  of  expense  items  and 
credit  the  Proprietors'  Stock  accounts  with  the  same  amount. 

If  other  persons  owe  the  proprietors  on  account,  accounts  will  be  opened  with  these  persons 
and  they  will  be  debited  with  the  various  amounts  owed  and  the  Proprietors'  Stock  accounts  will 
be  credited  with  the  same  amounts,  as  these  accounts  are  part  of  their  investments,  and  the  sum 
of  the  debits  and  the  sum  of  the  credits  on  the  books  are  still  equal. 

If  the  proprietors  owe  other  persons  on  account,  accounts  will  be  opened  with  these  persons 
and  they  will  be  credited  with  the  various  amounts  due  them  and  the  Proprietors'  Stock  accounts 
will  be  debited  with  the  same  amounts.  Their  net  investments  are  just  that  much  less  than  the 
sum  of  the  credits  to  their  stock  accounts,  and  the  rule  of  a  debit  equal  to  every  credit  has  beer 
fulfilled. 

If  you  buy  merchandise  and  pay  cash  for  it,  you  debit  Merchandise  and  credit  Cash  with 
the  price  paid  for  the  goods.     (Why?) 

If  you  buy  merchandise  on  account,  you  debit  Merchandise  and  credit  the  personal  account 
of  the  person  from  whom  you  buy  the  goods,  with  the  price  of  the  goods.     (Why?) 

If  you  sell  merchandise  for  cash,  you  debit  Cash  and  credit  Merchandise  with  the  amount  of 
the  sale.     (Why?) 


30        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

If  you  sell  merchandise  on  account,  you  debit  the  personal  account  of  the  person  to  whom  you 
sell,  and  credit  Merchandise  with  the  amount  of  the  bill.     (Why?) 

If  you  buy  additional  store  and  office  fixtures  for  cash,  you  debit  the  Store  and  Office  Fixtures 
account,  and  credit  Cash  with  what  they  cost  you.     (Why?) 

If  you  buy  store  and  office  fixtures  on  account,  you  debit  Store  and  Office  Fixtures,  and  credit 
the  personal  account  of  the  person  from  whom  you  purchase  them  with  the  amount  you  have 
agreed  to  pay  for  them.     (Why?) 

If  you  sell  any  of  your  store  and  office  fixtures  for  cash,  you  debit  Cash  and  credit  Store  and 
Office  Fixtures.     (Why?) 

If  you  sell  any  of  your  store  and  office  fixtures  without  receiving  cash  for  them,  you  debit  the 
account  of  the  person  to  whom  you  sell  same  with  the  amount  he  is  to  pay  for  them,  and  credit 
Store  and  Office  Fixtures.     (Why?) 

If  you  pay  any  money  for  store  rent,  fuel,  light,  clerk  hire,  salaries,  advertising,  printing, 
stationery,  freight  or  anything  else  other  than  merchandise  and  store  and  office  fixtures,  you  debit 
the  Expense  account  and  credit  Cash.     (Why?) 

If  any  person  who  owes  the  proprietors  pays  all  or  part  of  his  account,  you  debit  Cash  and 
credit  the  account  of  the  person  who  made  payment,  with  the  amount  of  the  payment.     (Why?) 

If  the  proprietors  pay  part  or  all  of  an  account  they  owe  to  some  other  person,  you  debit  the 
person  to  whom  the  payment  is  made,  and  credit  Cash  with  the  amount  of  the  payment  made. 
(Why?) 

From  the  above  directions,  you  will  perceive  that  whenever  there  is  some  account  to  be  debited, 
there  is  always  some  other  account  to  be  credited,  and  whenever  there  is  some  account  to  be  cred- 
ited, there  is  always  some  other  account  to  be  debited,  and  since  the  debits  and  credits  are  always 
for  the  same  amount, — the  total  of  all  the  debits — and  the  total  of  all  the  credits — are  always  equal 
to  each  other,  and  the  books  always  balance  when  the  entries  have  been  properly  made. 

POSTING. 

41.  In  keeping  books,  whenever  there  is  a  transaction  to  record  in  which  cash  is  received,or 
in  which  cash  is  paid  out,  the  first  entry  is  made  in  the  Cash  Book.  When  the  debit  or  credit,  as 
the  case  may  be,  has  been  entered  in  the  Cash  Book,  it  is  not  necessary  to  make  the  entry  in  the 
Ledger  to  balance  or  off-set  the  Cash  Book  entry,  immediately.  In  fact,  the  Cash  Book  entries 
for  the  entire  day  are  usually  made  before  any  entries  are  made  in  the  Ledger  to  balance  or  off- 
set the  debits  or  credits  of  the  Cash  Book. 

The  reason  why  the  entries  in  the  Ledger  need  not  be  made  at  once  is — the  entries  in  the  Led- 
ger to  balance  the  Cash  Book  entries  are  not  made  from  memory,  but  are  made  from  the  Cash 
Book. 

In  Double  Entry  Bookkeeping  when  the  Cash  account  is  debited,  the  first  thing  written  in 
the  explanation  column  is  the  name  of  the  account  that  is  to  be  credited  for  the  same  amount, 
(see  illustration  of  Cash  Book  debits  on  page  40)  and  when  the  bookkeeper  wishes  to  make  the 
Ledger  entries  to  balance  the  Cash  Book  debits,  he  simply  turns  to  the  Cash  Book,  finds  the  first 
debit  for  which  no  credit  has  been  made  in  the  Ledger,  makes  the  credit  to  the  proper  account 
and  makes  a  mark  in  the  Cash  Book  to  show  that  the  credit  has  been  made  to  balance  the  Cash 
Book  debit. 

He  treats  the  next  Cash  Book  debit  in  the  same  way,  and  so  on  until  a  credit  has  been  made 
in  the  Ledger  to  the  proper  account  for  each  Cash  Book  debit.  Then  he  turns  to  the  credit  side 
of  the  Cash  Book,  finds  the  first  credit  for  which  no  debit  has  been  made  in  the  Ledger,  makes  a 
debit  to  the  proper  account  for  the  amount,  and  makes  a  mark  in  the  Cash  Book  to  show  that  the 
credit  has  been  balanced  by  a  debit  in  the  Ledger.  He  then  treats  the  next  Cash  Book  credit  in 
the  same  way,  and  so  on  until  the  Ledger  debits  have  all  been  made  for  all  the  Cash  Book  credits. 
By  referring  to  the  Cash  Book  credits  on  page  41,  you  will  notice  that  when  the  cash  account 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        31 

is  credited,  the  first  thing  written  in  the  explanation  column  is  the  name  of  the  account  that  is 
to  be  debited  for  the  same   amount. 

The  making  of  entries  in  the  Ledger,  to  balance  the  Cash  Book  debits  and  Cash  Book  credits, 
is  called  Posting  from  the  Cash  Book  to  the  Ledger.  Usually  the  number  of  the  Ledger  page  to 
which  the  entry  has  been  posted  is  written  opposite  the  entry  in  the  folio  column  in  the  Cash 
Book  to  show  that  the  Cash  Book  debit  has  been  balanced  by  a  Ledger  credit,  or  that  the  Cash 
Book  credit  has  been  balanced  by  a  Ledger  debit,  but  sometimes  simply  a  check  mark  is  used. 
Whichever  is  used  should  be  put  opposite  each  entry  in  the  Cash  Book  immediately  after  it  is 
posted  to  the  Ledger. 

For  illustrations  of  Cash  Book  entries  posted  to  the  Ledger,  see  Cash  Book  entries  on  pages 
40  and  41  and  the  same  as  posted  to  the  Ledger  on  pages  45  to  49.  Look  at  each  entry  first  in  the 
Cash  Book,  and  then  turn  to  where  it  is  posted  in  the  Ledger,  and  see  the  entry  there.  Notice 
that  in  the  Ledger,  the  number  of  the  page  in  the  Cash  Book  from  which  the  entry  is  posted,  is 
written  in  a  column  just  in  front  of  the  money  column.  This  page  number  is  written  at  the  same 
time  the  entry  is  posted  and  it  enables  a  person  looking  at  the  Ledger  to  turn  quickly  to  the 
original  entry  should  he  desire  to  do  so.  The  page  number  in  the  folio  column  of  the  Ledger  need 
not  be  repeated  in  any  account  except  when  the  page  from  which  the  posting  is  done  changes. 

THE  JOURNAL. 

42.  We  have  been  studying  the  recording  of  Cash  transactions,  and  you  have  noticed  that 
it  was  only  necessary  to  make  one  entry  at  the  time  each  transaction  took  place,  viz.;  the  entry  in 
the  Cash  Book,  and  that  you  had  all  of  the  entries  together  and  could  go  back  and  post  them  at 
your  convenience  to  make  the  Ledger  credits  to  balance  all  of  the  Cash  debits,  and  the  Ledger 
debits  to  balance  all  of  the  Cash  credits,  without  any  danger  of  forgetting  any  of  them.  In  nearly 
all  businesses,  however,  there  are  a  large  number  of  transactions  which  are  not  Cash  transactions, 
and  which  consequently  do  not  go  into  the  Cash  Book.  The  debits  and  credits  for  these  trans- 
actions would  be  scattered  from  one  end  of  the  Ledger  to  the  other,  and  if  they  were  entered  only  in 
the  Ledger,  there  would  be  great  danger  of  the  bookkeeper  forgetting  to  enter  on  the  books  some 
of  the  debits  or  credits  and  in  that  event,  the  books  would  be  thrown  out  of  balance,  and  the  book- 
keeper would  have  to  go  over  all  the  entries  made  in  his  Ledger  since  the  last  Trial  Balance  was 
taken  in  order  to  find  out  what  entry  or  entries  had  been  omitted.  To  avoid  the  danger  of  such 
omissions,  and  in  order  to  have  all  of  the  transactions  for  each  day,  and  all  of  the  transactions  for 
each  month,  grouped  together  in  convenient  form  for  reference,  a  book  called  the  Day  Book,  or 
Journal,  is  kept.  In  the  Journal  all  transactions  which  are  not  Cash  transactions,  are  recorded 
in  the  order  of  their  occurrence,  in  a  way  that  will  show  what  accounts  in  the  Ledger  are  to  be 
debited,  and  what  accounts  in  the  Ledger  are  to  be  credited  to  balance  these  debits.  Conse- 
quently the  bookkeeper  has  arranged  before  him  in  the  Journal  the  debits  and  credits  of  all  trans- 
actions, except  those  which  go  in  the  Cash  Book,  and  he  posts  from  the  Journal  to  the  Ledger 
just  the  same  as  he  posts  from  the  Cash  Book  to  the  Ledger,  except  that  in  posting  from  the  Jour- 
nal he  posts  both  the  debit  and  the  credit  for  each  transaction,  while  in  the  Cash  Book  he  needs 
to  post  only  one  or  the  other,  because  the  Cash  account  in  the  Cash  Book  is  just  the  same  as  an 
account  in  the  Ledger,  and  if  it  is  debited,  then  it  is  only  necessary  to  credit  some  Ledger  account 
for  a  like  amount,  and  if  it  is  credited,  it  is  only  necessary  to  debit  some  Ledger  account  for  a  like 
amount,  to  make  the  books  balance,  whereas  in  making  the  entries  in  the  Journal,  no  accounts 
are  debited  or  credited.  The  Journal  entries  are  merely  statements  indicating  what  accounts  are 
to  be  debited  and  what  accounts  are  to  be  credited,  arranged  under  the  dates  of  the  transactions 
so  that  the  bookkeeper  will  have  a  concise  record  of  all  transactions  for  reference  and  to  post  from, 
in  order  that  he  may  be  sure  not  to  omit  any  of  the  debits  or  credits,  and  therefore,  in  posting  from 
the  Journal,  it  is  necessary  to  make  both  the  debit  and  the  credit  entry  in  the  Ledger  for  each 
amount  to  keep  the  books  in  balance. 


32        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

Remember  that  all  except  cash  transactions  must  be  entered  in  the  Journal  first  and  then 
transferred  or  posted  from  there  to  the  Ledger. 

A  check  mark  may  be  used  to  indicate  the  fact  that  each  debit  and  each  credit  has  been 
posted  to  the  Ledger,  but  probably  the  best  way  to  indicate  this  is  to  write  in  the  column  at  the 
left  of  the  page,  right  opposite  each  debit  or  credit,  the  page  in  the  Ledger  to  which  the  entry  is 
posted.  Either  the  check  mark  or  the  Ledger  page  should  be  put  in  just  after  the  entry  has  been 
posted  in  the  Ledger,  and  not  before  the  entry  has  been  actually  posted.  It  is  well  to  add  both 
columns  of  the  Journal  before  beginning  to  post.  If  the  two  columns  are  not  equal,  that 
is  evidence  that  some  mistake  has  been  made  in  the  Journalizing,  and  the  mistake  had  better 
be  corrected  before  the  posting  is  done.  If  the  bookkeeper,  in  posting  from  the  Journal,  will  post 
all  of  the  debits  first,  which  are  all  posted  to  the  debit  side  of  the  Ledger,  and  after  that  post  all  of 
the  credits,  which  are  all  posted  to  the  credit  side  of  the  Ledger,  thus  avoiding  the  necessity  of 
changing  frequently  from  one  side  of  the  Ledger  to  the  other  side  of  the  Ledger  in  posting,  this 
will  lessen  his  liability  to  make  errors  in  posting. 

The  entry  in  the  Journal  always  reads — some  person  or  some  account,  debtor,  to  some  person 
or  some  account,  creditor.  The  amount  of  the  debit  is  written  in  the  first  money  column,  which 
is  the  debit  column  in  the  Journal,  and  the  amount  of  the  credit  is  written  in  the  second  money 
column,  which  is  the  credit  column  in  the  Journal.  Arranging  debits  and  credits  in  order  in  the 
Journal  is  called  Journalizing. 

For  illustration  of  how  Journal  entries  are  arranged  and  worded,  see  the  Journal,  pages  42 
to  44.  Note  how  each  Journal  entry  is  posted  to  two  accounts  in  the  Ledger  by  turning  from  the 
Journal  to  the  Ledger  pages  indicated  in  the  folio  columns  of  the  Journal  and  seeing  just  how 
each  Journal  entry  is  posted.  Note,  also,  that  the  Journal  page  from  which  the  posting  is  done  is 
shown  in  the  Ledger  folio  column. 

TRIAL  BALANCES. 

43.  Taking  a  Trial  Balance  is  simply  finding  out  whether  or  not  the  books  balance.  This 
may  be  done  by  first  adding  together  all  of  the  debits  found  on  the  books,  and  then  adding  together 
all  of  the  credits  found  on  the  books.  If  the  books  are  in  balance  the  total  of  all  of  the  debits  will 
be  the  same  as  the  total  of  all  of  the  credits.  Another  method  of  taking  a  Trial  Balance  is  to  set 
down  in  one  column  the  amount  of  the  difference  from  every  account  in  which  the  debit  side  ex- 
ceeds the  credit  side  and  to  set  down  in  another  column  the  amount  of  the  difference  from  every 
account  in  which  the  credit  side  exceeds  the  debit  side,  and  then  add  the  columns.  If  the  books 
are  in  balance,  the  sum  of  the  one  column  will  be  the  same  as  the  sum  of  the  other  column. 

If  the  books  are  not  in  balance,  the  bookkeeper  has  failed  to  make  credits  equaling  or  bal- 
ancing the  debits,  or  debits  equaling  or  balancing  the  credits,  or  has  made  some  other  mistake  in 
his  work  and  must  find  his  mistake  wherever  or  whatever  it  may  be,  and  correct  it  so  that  the 
books  will  balance.  To  make  a  correction,  rule  two  red  ink  lines  through  the  wrong  amount  or  ex- 
planation and  write  the  correction  just  above  the  error.  Never  erase.  Books  containing  erasures 
will  not  be  admitted  as  evidence  in  court.    A  Trial  Balance  is  illustrated  on  page  50. 

BILLS  OR  INVOICES. 

44.  A  Bill  or  Invoice,  the  usual  form  for  which  is  herewith  shown,  should  contain  (a)  the  name 
and  address  of  the  person  making  the  sale ;  (b)  the  date  of  the  sale ;  (c)  the  name  and  address  of  the 
person  to  whom  the  sale  is  made;  (d)  the  terms  on  which  the  sale  is  made;  (e)  an  itemized  list  of 
the  articles  sold,  showing  the  number,  or  quantity,  of  each,  the  price  per  unit,  the  price  for  the 
total  amount  of  each  article  and  the  total  amount  of  the  sale. 

The  bookkeeper  or  bill  clerk  must  make  out  a  bill  for  every  bill  of  goods  sold  and  as  soon  as 
delivery  or  shipment  of  the  goods  has  been  made,  the  bill  should  be  given  or  mailed  to  the  pur- 
chaser.   When  a  bill  or  invoice  is  received,  the  bookkeeper  before  entering  it  should  verify  the 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        33 

multiplications  and  additions  to  see  that  the  bill  has  been  figured  correctly  and  should  have  the 
receiving  clerk  check  up  the  goods  received  to  see  that  they  correspond  in  every  particular  with  the 
bill.  The  buyer,  purchasing  agent,  or  whoever  placed  the  order,  should  also  O.K.  the  quality 
and  the  price  before  the  invoice  is  entered  upon  the  books.  Any  shortage  or  substitution  should 
be  taken  up  at  once  with  the  person  from  whom  the  goods  were  purchased. 

Bills  should  be  preserved  until  paid.  When  paid  they  should  be  receipted  and  should  be  filed 
for  reference  in  the  event  of  any  question  ever  arising  concerning  the  goods  bought,  the  price  paid, 
the  date  or  fact  of  payment,  the  terms  agreed  upon,  or  any  other  matter  concerning  which  the 
receipted  bill  would  contain  information. 

Bill  or  Invoice. 

CLAIMS    FOR     DAMUCE    OR    DEDUCTION    TO    BE    MADE    IMMEDIATELY    ON    RECEIPT    OF    GOODS 

Alfred  Lowry  &  Bro. 

WHOLESALE  GROCERS  AND  COFFEE  IMPORTERS 

50-54    N.    DELAWARE.   AVE.    AND    49-53    N.    WATER    ST.  PHILADELPHIA.    PA. 

Sold  to        Reitz  Bros.  Sept.  1,   19- 

Address  416  W.  Lexington  St. 


BELL   AND    KEYSTONE  'PHONES 
Thi  goods  billed  ox  this  Invoice  are  guarantee d  to  comrly  with  all  the  State  and  Federal  Food  Laws.  Alfrio  Lowry  ■  Bro. 


4 

DZ 

#1  POSTUM 

1 

BX 

SML  IVORY  SOAP 

50 

LB 

CUBE  SUGAR 

3 

CTN 

ARGO  STARCH 

5 

CTN 

BECKERS  SML  B  WHEAT 

3 

DZ 

5C  RUMF  B  POWDER 

6 

DZ 

CREAM  OF  WHEAT 

1 

DZ 

SHRED  WHEAT 

1 

DZ 

SUN  MAID  RAISINS 

4 

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FRK  2#  GRAN 

! 

BX 

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LIGHT  HOUSE  CLEANSER 

2 

BX 

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LA  FRANCE  TABLETS 

30 

5 

20 

85 

3 

85 

06^ 

3 

38 

80 

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40 

45 

7 

25 

45 

1 

35 

50 

9 

00 

10 

1 

20 

09 

1 

08 

66 

14 

64 

75 

5 

50 

75 

1 

88 

85 

7 

70 

85 

2 

55 

66  \ 

98 


34        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

STATEMENTS. 

45.  It  is  customary  in  business  for  the  bookkeeper,  on  the  first  day  of  each  month,  to  send 
a  statement  of  account  to  every  person  who  is  indebted  to  the  firm  for  which  the  books  are  kept. 

The  usual  form  of  statement,  which  is  herewith  shown,  shows  (a)  the  balance  due  at  the  end 
of  the  preceding  month,  if  any;  (b)  the  date  and  the  amount  of  each  sale  to  the  person  during  the 
month;  (c)  the  date  and  the  amount  of  each  payment  received  from  the  person  during  the  month. 
The  sum  of  the  payments  made  during  the  month  should  he  subtracted  from  the  total  indebted- 
ness and  the  result  will  be  the  net  indebtedness  on  the  date  on  which  the  statement  is  issued. 

In  preparing  statements,  bear  in  mind  that  the  first  money  column  is  an  item  column  and  the 
second  money  column  a  total  column.  If  there  is  only  one  debit  or  only  one  credit,  it  goes  into 
the  total  column  only,  but  if  there  is  more  than  one  debit  or  more  than  one  credit,  the  items  go  into 
the  item  column  and  the  total  is  extended  in  each  case  into  the  total  column. 

Statements  serve  a  double  purpose.  First,  they  show  the  debtor  how  the  account  stands  on 
the  creditor's  books.  It  is  the  business  of  the  bookkeeper  when  a  statement  is  received,  to  com- 
pare it  with  his  books  and  if  there  is  any  discrepancy  to  immediately  take  the  matter  up  with  the 
creditor  so  as  to  have  the  mistake  corrected.  Second,  they  call  the  attention  of  the  debtor  to  the 
various  items  of  indebtedness  and  indicate  that  the  creditor  has  not  forgotten  the  matter  and 
would  be  pleased  to  receive  payment  if  due  or  when  due. 

Statements  are  made  up  from  customers'  accounts  and  of  course  all  posting  must  be  done 
before  the  statements  are  made  out.  Now,  in  order  not  to  be  overworked  at  the  end  of  the  month 
and  yet  to  have  his  statements  ready  for  the  mail  at  the  close  of  business  on  the  last  business  day 
before  the  first  of  the  month,  the  bookkeeper  may  begin  to  prepare  his  statements  at  the  middle 
of  the  month  or  even  earlier.  He  can  at  that  time  write  on  each  statement  the  date  on  which  the 
statement  is  to  be  issued,  the  name  and  address  of  the  customer  to  whom  the  statement  is  to  go, 
and  such  debits  and  credits  as  appear  in  the  account  up  to  that  time.  Then  if  these  partly  made 
out  statements  are  kept  in  alphabetic  order,  or  in  order  according  to  Ledger  folios,  depending  in 
any  case  upon  the  arrangement  of  accounts,  it  will  be  comparatively  easy  for  the  bookkeeper  to 
compare  them  with  the  accounts  and  make  such  additions  as  may  be  necessary  two  or  three  days 
before  the  end  of  the  month.  This  will  leave  very  little  work  to  do  in  order  to  complete  the  state- 
ments on  the  last  day  of  the  month.  As  they  are  completed,  they  may  be  handed  to  the  office 
boy  for  enclosure  in  window  envelopes,  if  used,  otherwise  to  one  or  more  rapid  typists,  according 
to  the  number  of  statements.  The  addressing  of  the  envelopes  may  also  be  done  during  the  month 
whenever  the  typists  are  not  occupied  with  other  work.  If  this  advance  work  can  be  successfully 
put  through,  customers  in  the  same  city  will  receive  their  statements  in  the  first  mail  on  the  first 
of  the  month.  However,  many  firms  are  satisfied  if  their  statements  are  mailed  on  the  first,  second 
or  third  of  the  month. 

Now  that  window  envelopes  have  come  into  general  use,  the  headings  of  bills  and  statements 
are  usually  arranged  so  that  the  name  and  address  of  the  customer  as  written  on  the  bill  or  state- 
ment show  through  the  window  of  the  envelope  and  this  saves  the  work  of  addressing  envelopes 
for  bills  and  statements.  This  is  a  very  great  saving  to  firms  that  have  a  large  number  of  bills 
and  statements  to  mail.  When  window  envelopes  are  used,  the  folding  and  enclosing  must  be 
done  carefully  so  that  the  name  and  address  of  the  person  for  whom  the  bill  or  statement  is  in- 
tended, show  plainly  through  the  window  when  enclosed  in  the  envelope. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE.        35 


•Toiio624 


STATEMENT 


50-52-54  N.  DELAWARE  AVE. 

Philadelphia. B»Pt  .    lf 19  — 

MoQa»  A  Co., 

. 9.06...S.......21.s.t....St... - 


Foho  451. 


STATEMENT 


To  ALFRED    LOWRY    &    BRO.  Dr. 


Aug. 


31 


Mdse. 
Cash 


£r. 


Balance 


Statement  showing  one  debit  and  one  credit 


50-52-54  N.  DELAWARE  AVE. 

Philadelphia. S.ep.t.......l, 19- 

Boy er  & . Co., 

11.4.  ..Gann&n....S.tze.et... _ 


To  ALFRED    LOWRY    &    BRO.  Dr. 


Aug.     1  Per  statem't  rendered       86 
10     Mdse.  4  80 


23 


37 


Cr. 


28     Cash 


50  33  16 


_2P_ 


13  16 


Statement  showing  several  debits  and  one 
credit . 


Folk. 434 STATEMENT 

50-52-54  N.  DELAWARE  AVE. 

Philadelphia Sept. 1, '9  — 


Jt   Ti    PfcUtT, 

_ ao40  h.  and  ati 


To  ALFRED    LOWRY    &    BRO.  Dr 


Aug. 


Per  statem't  rendered 
Cr. 


10    Cash 
20 

30 


Statement  showing  one  debit  and  several 
credits*! 


Folio  .5.7.3 STATEMENT 

50-52-54  N.  DELAWARE  AVE 

Philadelphia. Sft. 1, 1 9  - 


.William ...  Jackson., 

__ 3.1.7....E........Bftlt.imQx.e.....S.t.,..._ 


Toi 

M. 

FRED  LOWRY  &  BRO.  Df. 

Aug. 

2 

14 

Mdse. 

• 

Cr. 

117 
56 

50 
30 

173 

30 

10 
37 

Cash 

50 
57 

00 
50 

117 

50 

55 

70 

Stat 
more 

erne 
th 

nt  showing  more  t 
an  one  credit. 

han 

one 

debit 

and 

(Student's  name) 

firm  that  owes 


36        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

46.  The  teacher  will  have  each  student  make  out  a  bill  for  every  bill  of  goods  sold   by 
&  Co.  in  the  exercises  which  follow,  and  also  a  statement  for  each 

&  Co.  at  the  close  of  business  in  each  set  of  trans- 

(Student's   name) 

actions.  If  the  teacher  sees  that  the  student  has  acquired  facility  in  making  out  bills  and  state- 
ments before  doing  all  of  the  work  above  directed,  the  student  may,  at  the  teacher's  option,  be 
excused  from  part  of  it. 

COLLECTIONS. 

47.  No  business,  making  sales  on  account  or  on  any  terms  other  than  for  cash,  will  be  suc- 
cessful unless  proper  attention  is  given  to  the  matter  of  collections.  If  the  business  for  which  you 
are  keeping  books  has  no  regular  collection  department,  it  is  your  business  as  bookkeeper  to  see 
that  the  accounts  due  your  firm  are  paid  when  due.  In  a  great  majority  of  businesses  the  pro- 
prietor is  busy  with  other  departments  of  the  business  and  is  apt  to  overlook  the  matter  of  collec- 
tions to  a  greater  or  less  extent.  The  due  and  past  due  accounts  do  not  come  to  las  attention  daily 
as  they  do  to  the  attention  of  the  intelligent  bookkeeper  in  his  daily  work.  By  being  efficient  in 
the  matter  of  collections,  you  can  make  yourself  worth  a  much  larger  salary  to  your  employer  and 
you  are  very  likely  to  receive,  generally  speaking,  remuneration  in  direct  proportion  to  your  worth. 

If  an  account  is  past  due,  statements  sent  at  intervals  of  about  ten  days  with  rubber  stamp 
imprints,  similar  to  the  forms  shown  herewith,  will  very  frequently  bring  a  remittance  or  a  promise 
of  a  remittance.  If  a  firm  outside  of  your  own  city  is  believed  to  be  responsible  and  an  account 
becomes  more  than  one  month  overdue,  a  foot-note  on  your  statement  to  the  effect  that  "  If  this 

account  is  not  paid  before  the instant,  we  will  draw  on  you  at  sight.     If  you  prefer  to  make 

payment  by  check,  kindly  have  your  remittance  reach  us  before  that  date"  will  often  get  the 
money  for  you.  If  it  does  not,  the  draft  may,  and  if  the  draft  is  sent  with  a  "No  protest" 
notice  attached,  there  is  very  little  expense  in  connection  with  this  efficient  method  of  making 
collection  of  slow  accounts. 

Often  a  word  or  two  written  on  the  statement  with  a  pen  in  the  nature  of  a  personal  appeal, 
will  bring  a  remittance  or  a  response. 

If  all  of  your  personal  efforts  fail,  with  the  permission  of  your  employer,  it  may  be  well  to  call 
to  your  assistance  the  service  of  some  concern  such  as  the  International  Creditors'  Association, 
St.  Louis,  Mo.,  whose  assistance  can  be  had  at  small  cost  and  who,  because  of  their  experience  and 
their  methods,  will  be  able  to  collect  many  of  the  accounts  that  you  personally  are  not  able  to  get. 


Collection  Rubber  Stamps. 


This  account  has  no  doubt,  escaped 
your  notice.  Will  you  please  favor  us  with  a 
remittance  by  return  mail  and  oblige  ? 


Ill 


l  JKa^We  have  to  again  remind -you  of  thH 
|  account  which  is  much  overdue  and  mutt 
ask  you  for  an  early  settlement 


"p"  11PESTS 

1 1     **"  Again  reminding  you  of   this   account 
I     which  is  now  much  overdue.     Please  mak» 
U    Immediate  settlement  and  thus  save  further 
expense  and  unpleasantness 


WRITTEN  TEST  NO.  3. 


1.  What  is  the  general  rule  for  Double  Entry  Bookeeping? 

2.  Should  the  total  of  all  the  credits  or  the  total  of  all  the  debits  in  a  set  of  books  be  the 
larger? 

3.  Does  the  Cash  account  differ  from  the  accounts  kept  in  the  Ledger,  and  if  so,  in  what 
way? 

4.  What  is  the  Cash  account  kept  to  show? 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        37 

5.  If  there  is  cash  on  hand  at  the  time  the  books  are  opened,  in  what  two  accounts  will  it 
appear,  and  which  account  will  be  debited,  and  which  credited? 

6.  What  is  the  Merchandise  account  kept  to  show? 

7.  If  there  is  merchandise  on  hand  at  the  time  the  books  are  opened,  in  what  two  accounts 
will  it  appear,  and  which  account  will  be  debited  and  which  credited? 

8.  What  is  the  Store  and  Office  Fixtures  account  kept  to  show? 

9.  If  there  are  store  and  office  fixtures  on  hand  at  the  time  the  books  are  opened,  in  what  two 
accounts  will  they  appear,  and  which  account  will  be  debited  and  which  credited? 

10.  What  is  the  Expense  account  kept  to  show? 

11.  If  there  are  things  belonging  to  the  Expense  account  on  hand  at  the  time  the  books  are 
opened,  in  what  two  accounts  will  they  appear,  and  which  account  will  be  debited  and  which 
credited? 

12.  What  are  accounts  with  other  persons  kept  to  show? 

13.  If  other  persons  owe  the  proprietor  of  the  business  at  the  time  the  books  are  opened, 
in  what  two  accounts  will  that  be  shown,  and  which  account  will  be  debited  and  which  credited? 

14.  If  the  proprietor  of  the  business  owes  other  persons  at  the  time  the  books  are  opened, 
in  what  two  accounts  will  that  be  shown,  and  which  account  will  be  debited  and  which  credited? 

15.  If  you  buy  merchandise  for  cash,  what  account  is  debited,  and  what  account  credited? 
If  you  buy  merchandise  on  account? 

16.  If  you  sell  merchandise  for  cash,  what  account  is  debited,  and  what  account  credited? 
If  you  sell  merchandise  on  account? 

17.  If  you  buy  store  and  office  fixtures  for  cash,  what  account  is  debited,  and  what  account 
credited?     If  you  buy  them  on  account? 

18.  If  you  sell  any  of  your  store  and  office  fixtures  for  cash,  what  account  is  debited,  and 
what  account  credited?    If  you  sell  them  on  account? 

19.  If  you  pay  money  for  rent,  fuel,  light,  salaries,  advertising,  freight  or  anything 
except  merchandise  or  store  and  office  fixtures,  what  account  should  be  debited  and  what  account 
credited? 

20.  If  a  person  who  owes  the  proprietor  pays  all  or  part  of  his  indebtedness,  to  what  accounts 
should  entries  be  made,  and  which  account  should  be  debited  and  which  credited? 

22.  Are  the  debits  and  credits  to  be  made  for  every  transaction  always  equal  to  each  other? 

23.  When  are  books  said  to  balance?    Accounts? 

24.  How  can  a  Trial  Balance  be  taken? 

25.  For  what  purpose  are  Trial  Balances  taken? 

26.  If  when  a  Trial  Balance  is  taken,  the  books  do  not  balance,  what  does  that  prove? 
What  must  the  bookkeeper  do  in  that  case? 

DIRECTIONS  FOR  STUDYING  THE  ILLUSTRATIONS. 

48.  When  the  preceding  instructions  have  been  so  thoroughly  mastered  that  you  can  answer 
all  of  the  questions  in  Test  No.  3  correctly,  without  referring  to  the  book,  you  may  think  in  what 
book  and  how  the  first  entry  for  each  of  the  transactions  in  Exercise  No.  5  should  be  made  in 
keeping  a  complete  set  of  books,  and  then  turn  to  the  Cash  Book,  pages  40  and  41,  or  to  the  Jour- 
nal, pages  42  to  44,  and  see  whether  or  not  the  entry  is  made  where,  and  in  the  way  you  thought 
it  should  be  made. 

When  you  have  done  as  above  directed,  you  should  take  the  Cash  Book,  pages  40  and  41, 
and  first  look  at  each  debit  and  think  how  and  where  it  should  be  posted.  Upon  deciding  this, 
you  should  turn  to  the  Ledger,  pages  45  to  49,  and  see  whether  or  not  the  entry  is  posted  in  the 
way  and  in  the  place  you  thought  it  should  be  posted.  After  the  debit  side  of  the  Cash  Book  has 
been  finished,  you  should  think  out  and  verify  the  posting  of  each  item  on  the  credit  side  of  the 
Cash  Book  in  the  same  manner. 


38        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

After  finishing  the  work  in  the  Cash  Book,  you  should  take  the  Journal,  pages  42  to  44,  and 
look  at  each  entry  and  should  think  where  and  how  each  entry  should  be  posted  to  the  Ledger, 
and  after  deciding  about  each  entry,  should  turn  to  the  Ledger,  pages  45  to  49,  and  see  whether  or 
not  it  is  posted  in  the  place  and  in  the  way  you  thought  it  should  be  posted.  Verify  all  Journal 
debits  first,  then  all  Journal  credits. 

After  the  above  work  has  deen  done,  you  may  take  a  Trial  Balance  of  the  books,  pages  40  to 
49,  according  to  the  second  method  described  in  article  43  and  having  taken  it,  may  compare  same 
with  the  trial  balance  on  page  50. 

EXERCISES  FOR  PRACTICE  IN  KEEPING  BOOKS  BY  DOUBLE  ENTRY. 

After  you  have  studied  the  illustration  carefully  according  to  directions,  you  may  make  Jour- 
nal and  Cash  Book  entries  for  Exercise  No.  5  without  referring  to  the  illustration  and  show  same 
to  your  teacher  and  if  the  teacher  pronounces  the  Cash  Book  and  Journal  entries  correct,  you  may 
post  same,  then  take  a  Trial  Balance  and  submit  it  to  the  teacher. 

The  heading  of  each  personal  account  in  the  Ledger  must  contain  the  address  of  the 
person  with  whom  the  account  is  kept.  The  accounts  with  the  proprietors  of  the  business  are,  of 
course,  exceptions  to  this  rule.  There  is  a  directory  in  the  back  of  the  book  containing  the 
addresses  of  the  persons  with  whom  business  is  transacted  in  the  following  exercises  and  sets. 

After  Exercise  No.  5  has  been  finished,  you  may  work  out  Exercises  Nos.  6  and  7  in  the  same 
way,  submitting  Cash  Book  and  Journal  entries  to  the  teacher  before  posting,  and  a  Trial  Balance 
after  posting. 

EXERCISE  NO.   5. 

WHOLESALE    GROCERY    BUSINESS    OF &    CO. 

(Student's  name) 

JAN.  28,  19—. 

Buy  of  Woolson  Spice  Co.,  on  account,  100  bbls.  granulated  sugar,  34,362  lbs.  @  5$  cents 
per  lb.,  $1,804. 

Sell  to  Boyer  &  Co.,  on  account,  10  cases  Lion  Brand  Coffee  at  $2.50  per  case,  $25. 

Sell  to  Jordan  Stabler  Co.,  on  account,  25  bbls.  GambriU's  Best  Flour  at  $4.40,  $110. 

Sell  to  Reitz  Bros,  on  account,  8  boxes  Ivory  Soap  (large  size)  at  $6  per  box,  $48. 

Sell  to  Bryant  &  Clarvoe  on  account,  12  cases  Quaker  Oats,  24  packages  to  the  case,  at  $2.25, 


$27. 


JAN.   29. 


Sell  Gold  Bros.,  on  account,  30  bbls.  GambriU's  Best  Flour  at  $4.40,  $132. 
Sell  Boyer  &  Co.,  15  cases  Eagle  Brand  Tomatoes,  24  cans  to  the  case,  at  $1.50  per  case,  $22.50. 
Sell  Jordan  Stabler  Co.,  on  account,  20  bbls.  granulated  sugar,  weight  6,851  lbs.,  at  5f  cents 
per  lb.,  $393.93. 

JAN.  30. 

Sell  to  John  T.  Bailey  for  cash,  12  bbls.  GambriU's  Best  Flour  at  $4.40,  $52.80. 
Receive  from  Jordan  Stabler  Co.,  check  for  $503.93. 
Buy  10  bu.  oats  (for  the  horse)  at  42  cents  per  bu.,  $4.20. 
Pay  for  repairs  to  elevator,  $4.60. 
Pay  for  shoeing  horse,  $2.25. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        39 

Sell  to  Wm.  Jackson,  on  account,  5  bbls.  granulated  sugar,  weighing  respectively  337,  353, 
340,  344,  and  342  lbs.,  at  5f  cents  per  lb.,  $98.67,  and  6  bbls.  Gambrill's  Best  Flour  at  $4.40  per 
bbl.,  $26,40,  total  $125.07. 

Sell  to  F.  W.  Johnson  on  account,  100  lbs.  California  Evaporated  Peaches  at  12  cents  per  lb., 
$12;  and  10  cases  Eagle  Brand  Corn,  24  cans  to  the  case,  at  $1.50  per  case,  $15,  total  $27. 

Pay  for  putting  some  new  shelving  in  store,  $15.35. 

JAN.  31. 

Sell  Reitz  Bros,  on  account,  6  bbls.  Goldenrod  Syrup,  containing  respectively  48,  55,  57,  45, 
50  and  53  gals,  total  308  gals.,  at  32  cents  per  gal.,  $98.56. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  account,  200  bbls.  Gambrill's  Best  Flour  at  $4  per 
bbl.,  $800. 

Sell  to  Gold  Bros,  on  account,  3  bbls.  cider  vinegar  at  $2.52  per  bbl.,  $7.56. 

Pay  for  repairs  to  wagon,  $3.25. 

Buy  of  National  Biscuit  Co.,  on  account,  300  cases  Uneeda  Biscuit  at  $1.75  per  case,  $525.00. 

FEB.   1. 

Sell  Maynadier  &  Co.,  on  account,  25  cases  Uneeda  Biscuit  at  $2  per  case,  $50. 
Sell  Snare  &  Miley  for  cash,  2  bbls.  granulated  sugar,  686  lbs.,  at  5f  cents  per  lb.,  $39.45. 
Buy  5  bu.  corn  for  horse  at  52  cents  per  bu.,  $2.60. 

Sell  Percy  M.  Reese,  on  account,  500  lbs.  mixed  Mocha  &  Java  Coffee  at  30  cents  per  lb., 
$150. 

Buy  2  bales  of  hay  for  horse  at  $1.10  per  bale,  $2.20. 

FEB.  2. 

Send  National  Biscuit  Co.,  on  %,  check  for  $100. 

Pay  gas  bill  for  January  $12.25. 

Receive  from  Reitz  Bros.,  check  for  $125. 

Receive  from  Boyer  &  Co.,  check  for  $22.50  for  bill  of  Jan.  29. 

Buy  from  J.  A.  Edmondson  &  Son,  for  cash,  groceries  amounting  to  $326.84. 

Sell  Bryant  &  Clarvoe,  on  account,  2  doz.  cases  Eagle  Brand  Corn  at  $1.50  per  case,  $36. 

Buy  from  Woolson  Spice  Co.,  on  account,  100  cases  Lion  Brand  Coffee,  $2.12^  per  case,  $212.50. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  50  bbls.  Superior  Family  Flour  at  $3.75  per  bbl.,  $187.50. 

Sell  Snyder  &  Co.,  on  account,  3  bbls.  granulated  sugar,  weighing  339,  346,  336  lbs.,  total 
1,021  lbs.,  at  5|  cents  per  lb.,  $58.71. 

Sell  to  Gold  Bros,  on  account,  6  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  $26.40. 

Sell  to  Reitz  Bros,  on  account,  15  cases  Uneeda  Biscuit  at  $2  per  case,  $30. 

Pay  for  advertisement  in  the  "Inquirer"  $14.50;  for  5  tons  coal,  $23.  For  bill  of  stationery, 
$6.25.     For  insurance,  3  years  premium  on  $10,000  Md.  Fire  Insurance  Co.,  $60. 


40 


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MODERN  BOOKKEEPING,   ACCOUNTING  AND   BUSINESS   PRACTICE.        51 

EXERCISE  NO.  6. 

WHOLESALE    HARDWARE    BUSINESS   OF &    CO. 

(Student's  name) 

FEB.  4,  19—. 

Buy  from  the  National  Tool  &  Stamping  Co.,  on  account,  10  30  in.  Excelsior  Horse  Mowers  at 
$110.00  and  2  doz.  engineers'  wrenches  at  $19.20,  total  $1,138.40. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  account,  25  doz.  heavy  communicating  door  locks,  at 
$24.00,  12  doz.  vestibule  latches,  at  $20.00,  and  1  gross  window  catches  at  $26.86,  total  $866.86. 

Sell  to  Samuel  Emmert,  on  account,  25  doz.  porcelain  door  knobs,  at  $3.00,  and  1  doz.  bell 
pulls,  at  $8.19,  total  $83.19. 

Receive  from  Marshall,  Wescoat  &  Co.,  $862.63. 

Pay  gas  bill  for  Jan.,  $10.00. 

Sell  to  Young  Bros.,  on  account,  3  doz.  sliding  door  locks,  at  $18.00,  and  1  doz.  wood  door 
knobs,  at  $4.57,  total  $58.57. 

Sell  to  J.  H.  Constantine,  on  account,  1  doz.  large  door  pulls  and  plates,  at  $65.35  and  4  doz. 
coat  hooks,  at  $5.00,  total  $85.35. 

Pay  for  new  counters,  $35.00. 

Pay  rent  for  Feb.,  $125.00. 

FEB.  5. 

Sell  to  J.  R.  M.  Adams,  for  cash,  4  doz.  wrought  iron  padlocks,  at  $7.84,  $31.36. 
Buy  from  Frank  B.  Sloan  &  Co.,  on  account,  4  doz.  Gem  Food  Choppers,  at  $28.10,  $112.40. 
Pay  for  repairs  to  wagon,  $5.00. 

Sell  to  Miles  Hdwe.  Co.,  on  account,  12  doz.  blacksmiths'  hammers,  at  $30.00,  10  doz.  West- 
ern Cow  Bells,  at  $11.50,  and  1  doz.  awning  pulleys,  at  $2.38,  total  $477.38. 
Pay  subscription  to  "Hardware  Journal,"  $3.00. 
Pay  for  shoeing  horse,  $1.25. 

Sell  Frank  Beall  &  Co.,  on  account,  2  doz.  rip  saws,  at  $46.80,  $93.60. 
Buy  from  Henry  Disston's  Sons,  for  cash,  1  gross  saws,  (special)  at  $158.40. 
Sell  to  C.  C.  Pursey  &  Co.,  on  account,  1  doz.  umbrella  stands,  at  $59.95. 
Pay  National  Tool  &  Stamping  Co.,  $324.63. 
Receive  from  Samuel  Emmert,  check  for  $54.18. 

Buy  from  Francis  Albert  &  Co.,  on  account,  1  gross  double  pointed  tacks,  at  $14.86. 
Receive  from  Miles  Hardware  Co.,  check  for  $384.25. 

FEB.  6. 

Pay  for  5  bus.  oats  for  horse,  at  42^  per  bu.,  $2.10. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  account,  1-25  in.  Excelsior  Horse  Mower  at  $56.55. 

Receive  from  Young  Bros.,  $26.15. 

Receive  from  J.   R.   M.  Adams,   $30.75. 

Pay  Henry  Disston's  Sons,  $142.60. 

Sell  to  Union  Hardware  Co.,  on  account,  4  bench  vises,  at  $10.00,  1  jack  screw,  at  $6.90,  total 
$46.90. 

Receive  from  Frank  Beall  &  Co.,  on  account,  check  for  $64.50. 

Sell  to  Cumberland  Hdwe.  Co.,  on  account,  10  doz.  mortise  door  bolts,  flat  fronts,  at  $36.00, 
and  2  gross  cupboard  casters,  at  $17.31,  total  $394.62. 

Buy  5  bales  hay  for  horse,  at  $1.22^  per  bale,  $6.13. 


52        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

FEB.  7. 

Send  Frank  B.  Sloan  &  Co.,  check  for  $74.25. 

Buy  from  Maryland  Hinge  Co.,  on  account,  1  doz.  store  door  handles  at  $29.87. 

Receive  from  C.  C.  Pursey  &  Co.,  check  for  $32.65. 

Sell  to  A.  B.  Cochran  &  Co.,  for  cash,  3  doz.  natural  finish  communicating  door  locks,  at 
$24.17,  $72.51. 

Buy  from  Francis  Albert  &  Co.,  on  account,  6  doz.  push  buttons,  at  $10.50,  and  1  gross  doo 
keys,  at  $9.78,  total  $72.78. 

Buy  from  Wm.  Cole  &  Sons,  for  cash,  8  doz.  wire  pliers,  at  $15.00  and  1  doz.  levels,  at  $12.23, 
total  $132.23. 

EXERCISE  NO.  7. 

WHOLESALE    DRUG    BUSINESS    OF , . = ; &    CO. 

(Student  s  name* 

FEB.  8,  19—. 

Buy  from  Hance  Bros.  &  Wight,  on  account,  10  gross  bottles  Ammonia  at  $9,  12  gross  bottles 
Laudanum  at  $10,  25  gross  Chlorate  of  Potash  Tablets  at  $9,  4  doz.  Mother's  Gelatine  at  $18,  1 
gross  bottles  Syrup  of  Ipecac,  at  $9.50,  total  $516.50. 

Sell  to  John  D.  Singer,  on  %,  25  doz.  bottles  White  Solution  Carbolic  Acid  at  $2,  100  lbs.  Lump 
Copperas  at  20,  total  $52. 

Sell  to  C.  R.  Myers,  for  cash,  drugs  amounting  to  $250.00. 

Pay  for  advertisement  in  "Bulletin,"  $12. 

Sell  to  Double  &  Co.,  on  %,  24  doz.  bottles  Hydrogen  Dioxide  at  $6.00,  75  doz.  boxes  Insect 
Powder  at  750,  2  doz.  bottles  Laudanum  at  $5.09,  total  $210.43. 

Pay  rent  for  Feb.,  $175. 

Sell  to  Oliver  P.  Robinson,  on  %,  1  gross  bottles  Spirits  of  Camphor,  at  $9,  4  doz.  bottles 
Spirits  of  Nitre  at  750,  total  $12. 

Pay  for  labels,  $3.50. 

Sell  to  Jefferson  D.  Fore,  on  %,  4  doz.  Allcock's  Porous  Plasters,  at  $1.15,  3  gross  Corn 
Plasters  at  $9,  total  $31.60. 

Buy  of  Muth  Bros.  &  Co.,  on  %,  10  doz.  pkgs.  Epsom  Salts,  at  360,  60  doz.  pkgs.  Canary 
Seed  at  750,  2  gross  Bunion  Plasters,  $6.50,  total  $61.60. 

Sell  to  Chas.  A.  Brooks,  on  %,  drugs  amounting  to  $331.20. 

FEB.  9. 

Receive  from  Double  &  Co.,  check  for  $182.68  on  account. 

Send  check  to  Hance  Bros.  &  Wight,  $126.75  on  account. 

Sell  to  S.  S.  Davis,  on  %,  100  doz.  Seidlitz  Powders  at  $2.00,  100  rolls  Belladona  Porous 
Pasters,  at  $1.00,  total  $300. 

Buy  of  Wyeth  Bros.,  on  %,  38|  doz.  bottles  Carbolic  Acid  at  $1.00,  $38.50,  50  doz.  bottles 
Hydrogen  Dioxide  at  $6.00,  $300,  total  $338.50. 

Sell  to  A.  O.  Pilson,  on  %,  24  grosss  bottles  Paregoric  at  $9.00,  $216. 

Pay  for  show  case,  $35. 

Sell  to  T.  E.  Zimmerman  &  Co.,  on  %,  1  gross  bottles  Laudanum  $7.60,  15  doz.  bottles 
Hydrogen  Dioxide  at  $8.00,  $120,  total  $127.60. 

Sell  to  D.  C.  Auginbaugh  &  Son  for  cash,  1  gross  bottles  Calomel,  $5.27,  25  doz.  boxes  Seidlitz 
Powders  at  $2.00,  $50.00,  total  $55.27. 

Pay  for  3  tons  coal,  $18.75. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        53 

Sell  L.  N.  Meadows,  on  %,  1  gross  bottles  Ipecac  at  $8.15, 100  doz.  bottles  Witch  Hazel  at  $1.40, 
$140.00,  total  $148.15. 

Pay  for  washing  and  oiling  floors,  $8.00. 
Receive  from  Chas.  A.  Brooks,  check  for  $250.25. 
Pay  clerks  for  week  ending  Feb.  9, 


FEB.   11. 

Buy  from  Muth  Bros.  &  Co.,  for  cash,  20  doz.  bottles  Balsam  Copaiba  at  $9.27,  $185.40. 

Sell  Ezekiel  Forman,  on  %,  1  gal.  Witch  Hazel,  $1.10,  40  doz.  boxes  Cox's  Gelatine  at  $2.00, 
,  total  $81.10. 

Buy  from  Heckerman  &  Son,  for  cash,  drugs  amounting  to  $132.40. 

Receive  from  Oliver  P.  Robinson,  check  for  $12. 

Pay  for  repairing  store  room,  $85.25. 

Sell  to  John  D.  Stotlemeyer,  on  %,  100  doz.  pkgs.  Senna  Leaves,  at  37^,  $37.50. 

Receive  from  A.  O.  Pilson,  $213.63. 

Pay  subscription  to  "Druggist's  Journal,"  $3.50. 

Sell  to  Wm.  Stewart,  on  %,  25  doz.  boxes  Cox's  Gelatine,  at  $2.00,  $50,  1  gal.  Bay  Rum, 
75,  total  $52.75. 

FEB.  12. 

Receive  from  Ezekiel  Forman,  check  for  $32.50. 

Pay  for  stationery  and  postage,  $5.38. 

Buy  from  Sharp  &  Dohme,  on  account,  100  doz.  1  lb.  bottles  Hydrogen  Dioxide,  at  $6.00, 

),  100  doz.  I  lb.  bottles  Hydrogen  Dioxide  at  $2.00,  $200,  4  gross  Oil  of  Cloves  at  $9.15,  $36.60, 
total  $836.60. 

Receive  from  Jefferson  D.  Fore,  check  for  $23.98. 

Sell  to  Robert  Rose,  on  %,  40  doz.  cans  Insect  Powder  at  $1.00,  $40,  1  doz.  bottles  Carbolic 
Acid  at  $1.90,  total  $41.90. 

Receive  from  S.  S.  Davis,  check  for  $250.00. 
*     Pay  for  Cash  register,  $165.00. 

Sell  to  Hall,  Atkinson  &  Co.,  on  %,  10  cartons  Quinine  Pills  at  $1.54,  $15.40,  5  gross  bottles 
Paregoric  No.  5,  at  $4.00,  $20,  total  $35.40. 

Pay  for  packing  cases  $43.00. 

Receive  from  T.  E.  Zimmerman  &  Co.,  check  for  $116.32. 

Pay  for  Underwood  typewriter  $100. 

Receive  from  Wm.  Stewart,  $43.66. 

Pay  for  office  desk,  $22,  and  for  1000  circulars,  $5. 


54        MODERN  BOOKKEEPING,   ACCOUNTING  AND   BUSINESS  PRACTICE. 

49.  WRIGHT'S  RULES  FOR  FINDING  TRIAL  BALANCE  ERRORS. 

1.  Add  both  sides  of  the  trial  balance  again  to  see  whether  the  error  is  in  the  addition. 

2.  Find  the  exact  difference  between  the  sides  of  the  trial  balance  and  note  whether  the  ex- 
cess is  a  debit  or  a  credit. 

3.  Whenever  you  locate  an  error,  make  the  necessary  correction  in  all  of  the  books  affected 
and  on  the  trial  balance  and  determine  whether  the  correction  of  the  error  found  increases  or  di- 
minishes the  difference  between  the  sides  of  the  trial  balance.  If  the  correction  of  the  error  increases 
the  difference  between  the  sides  of  the  trial  balance,  add  the  amount  of  the  error  to  the  difference 
you  already  have,  but  if  the  correction  of  the  error  diminishes  the  difference  between  the  sides  of 
the  trial  balance,  subtract  the  amount  of  the  error  from  the  difference  you  already  have,  to  see  ex- 
actly how  much  your  trial  balance  is  still  out  of  balance.  Doing  this  will  save  you  the  necessity 
of  re-adding  both  sides  of  the  trial  balance  every  time  a  mistake  is  found.  The  difference  be- 
tween the  sides  of  the  trial  balance  will  become  zero  when  all  of  the  errors  have  been  found. 

4.  Glance  through  the  Ledger  to  see  whether  any  account  with  a  balance  equal  to  the  error 
has  been  missed  in  writing  up  the  trial  balance. 

5.  Glance  through  the  Cash  Book,  Journal  and  other  books  of  original  entry  to  see  whether 
an  amount  equal  to  the  error  has  been  missed  in  posting.  If  the  credit  side  of  the  trial  balance  is 
the  larger,  look  for  the  amount  among  the  debits  in  the  books  of  original  entry  and  vice  versa. 

6.  If  the  amount  of  the  error  is  divisible  by  two,  look  for  a  sum  equal  to  one-half  of  it  in  the 
trial  balance,  and  if  you  find  such  a  sum  in  the  trial  balance,  look  and  see  whether  that  sum  has 
been  carried  from  the  Ledger  to  the  wrong  side  of  the  trial  balance.  Look,  also,  through  the 
books  of  original  entry  for  an  amount  equal  to  one-half  of  the  error  and  if  you  find  such  an  amount, 
see  whether  it  has  been  posted  to  the  wrong  side  of  the  Ledger. 

7.  If  the  amount  of  the  error  is  divisible  by  either  nine  or  eleven,  look  for  a  transposition  or 
a  transplacement  of  figures  made  in  carrying  some  balance  from  the  Ledger  to  the  trial  balance. 

8.  Add  again  both  sides  of  the  Cash  Book  and  all  special  columns,  being  careful  to  see  that 
all  footings  are  correctly  carried  forward  from  page  to  page,  and  that  all  special  column  totals  are 
properly  posted  to  the  Ledger.  Be  on  the  lookout  for  transposition  or  transplacement  of  figures 
in  both  forwarding  and  posting. 

9.  Add  again  both  sides  of  all  accounts  in  the  Ledger,  seeing  in  each  case  that  the  subtrac- 
tion of  the  smaller  side  of  the  account  from  the  larger  side  of  the  account  has  been  correctly  per- 
formed and  that  the  correct  balance  has  been  carried  to  the  proper  side  of  the  trial  balance.  As 
this  is  done,  place  a  small  dot  or  check  mark  to  the  left  of  the  balance  on  each  account  where  it 
appears  in  the  Ledger,  and  to  the  left  of  the  same  number  on  the  trial  balance. 

10.  As  a  last  resort,  review  all  of  the  posting  from  the  Journal,  Cash  Book,  etc.,  to  the  Led- 
ger. Make  a  small  dot  or  a  check  mark  on  the  first  double  red  line  to  the  left  of  the  number  in 
both  books  every  time  you  find  an  amount  correctly  posted.  This  double  checking  is  the  only 
sure  way  to  locate  numbers  that  have  been  posted  twice. 

11.  If,  after  having  done  all  of  the  things  mentioned  above,  your  trial  balance  is  still  out  of 
balance,  begin  at  the  beginning  and  do  them  all  over  again.  Whenever  you  have  done  everything 
right,  your  books  must  balance, — they  can  not  help  it.  If  you  have  made  a  mistake,  you  must 
find  it,  and  you  can  find  it  if  you  will  hunt  patiently  and  persistently  for  it.  You  will  never  be  a 
good  bookkeeper  until  you  can  find  any  mistake  that  you  may  make,  so  never  give  up.  The 
confidence  in  your  own  ability  that  will  come  to  you  when  you  prove  to  yourself  that  you  can 
find  all  of  your  own  mistakes,  will  be  worth  to  you  many  times  what  it  will  cost  you  in  time  and 
labor  to  prove  this.     Stick  to  it  and  win. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        55 

OPENING  BOOKS. 

50.  In  opening  a  new  set  of  books,  the  first  thing  to  do  is  to  take  a  sheet  of  paper  and  make 
out  a  statement  of  the  Resources  and  the  Liabilities  of  the  person  for  whom  or  the  business  for 
which  the  books  are  to  be  opened.  If  the  business  is  a  partnership,  a  separate  statement  should 
be  made  for  each  partner,  showing  just  what  resources  and  what  liabilities  the  partner  brings  into 
the  business.  The  difference  between  the  resources  and  the  liabilities  brought  into  the  business  by 
any  partner,  is  the  Net  Investment  of  that  partner.  The  preliminary  statement  or  statements 
having  been  made,  an  entry  should  be  made  in  the  Journal  showing  the  resources  and  the  liabilities 
that  are  to  constitute  a  part  of  the  business  at  the  time  the  books  are  opened.  Remember  that 
the  difference  between  the  resources  and  the  liabilities  is  the  net  investment,  and  the  net  invest- 
ment or  each  net  investment  should  appear  in  the  credit  column  of  the  Journal  to  balance  the 
excess  of  the  resources  over  the  liabilities. 

The  form  of  a  Journal  entry  for  the  opening  of  a  set  of  books  will  be  found  illustrated  on  page 
59.     Study  that  illustration. 

(Resources  are  things  of  value,  such  as — Cash,  Merchandise,  Store  and  Office  Fixtures,  Ma- 
chinery and  other  equipment,  Teams,  Automobiles,  Real  Estate,  Notes  Receivable  and  Accounts 
Receivable.    Liabilities  are  debts,  such  as  Notes  Payable  and  Accounts  Payable.) 

In  posting  the  opening  Journal  entry,  the  cash  that  forms  part  or  all  of  the  investment  will, 
of  course,  be  posted  to  the  debit  side  of  the  Cash  Book,  or  Cash  account.  It  is  Cash  on  hand. 
(See  page  60.) 

If  a  stock  of  merchandise  forms  part  of  the  resources,  the  value  of  the  stock,  as  stated  in  the 
Journal  entry,  will,  of  course,  be  posted  to  the  debit  side  of  the  Merchandise  account.  It  is  Mer- 
chandise on  hand,  per  inventory. 

If  store  and  office  fixtures  on  hand  form  part  of  the  resources,  the  Store  and  Office  Fixtures 
account  will  be  debited  with  their  value  as  shown  in  the  Journal  entry.  They  are  Store  and  Office 
Fixtures  on  hand,  per  inventory. 

If  things  which  would  properly  belong  to  the  Expense  account,  are  part  of  the  resources,  the 
Expense  account  will  be  debited  with  the  value  of  such  things  on  hand  as  shown  in  the  Journal 
entry,  as  Expense  items,  per  inventory. 

If  some  personal  accounts  owed  to  the  person  or  firm  for  whom  the  books  are  opened,  appear 
in  the  Journal  entry  as  part  of  the  resources,  accounts  with  the  persons  will,  of  course,  be  opened  in 
the  Ledger  and  debited  with  the  amounts  owed. 

If  accounts  owed  by  the  person  or  firm  the  books  are  being  opened  for  appear  in  this  Journal 
entry  among  the  liabilities,  accounts  will  be  opened  in  the  Ledger  with  the  persons  and  will  be 
credited  with  the  respective  amounts  shown  by  the  Journal  entry  to  be  owed  to  them. 

When  all  of  the  resources  of  the  firm,  as  shown  by  the  opening  Journal  entry,  have  been 
posted  to  the  debit  side  of  the  proper  accounts,  and  all  of  the  liabilities,  as  shown  by  the  opening 
Journal  entry,  except  the  net  investment,  have  been  posted  to  the  credit  side  of  the  proper  ac- 
counts, if  a  Trial  Balance  is  taken,  the  Trial  Balance  will  show  the  total  of  the  debits  to  be  in  ex- 
cess of  the  total  of  the  credits  just  the  amount  of  the  net  investment  as  previously  figured  in  mak- 
ing the  preliminary  statement.  To  off -set  this  excess  in  debits,  and  to  show  how  much  is  invested 
in  the  business,  a  Stock  account  must  be  opened  and  credited  for  the  amount  of  the  net  investment. 
In  the  case  of  a  partnership,  a  Stock  account  should  be  opened  for  each  partner  and  credited  with 
the  amount  of  the  partner's  net  investment.  When  the  net  investment  or  net  investments  have 
been  credited  the  books  will  balance,  and  may  be  kept  in  balance  by  following  the  rule  previously 
learned  for  Double  Entry  Bookkeeping;  namely — "Whenever  you  debit  any  account,  credit  some 
other  account  or  accounts  for  the  same  amount  and  whenever  you  credit  any  account,  debit  some 
other  account  or  accounts  for  the  same  amount."  After  opening  a  set  of  books,  always  take  a  Trial 
Balance  in  order  to  be  sure  that  the  books  balance  before  proceeding  to  make  entries  for  business 
transactions. 


56        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

THE  STOCK  ACCOUNTS. 

51.  Previous  to  this  lesson  there  has  been  no  instruction  given  for  the  keeping  of  the  Stock 
account,  or  Stock  accounts.  As  has  just  been  mentioned,  the  Stock  account  is  kept  to  show  how 
much  is  invested  in  the  business. 

When  a  person  opens  a  business,  the  natural  way  to  do  would  be  to  give  him  credit  for  all  of 
the  resources  he  invests  in  the  business  and  to  debit  him  for  all  of  his  liabilities  which  the  business 
assumes.  Then,  the  difference  between  the  sides  of  his  account,  that  is,  the  difference  between 
the  resources  and  the  liabilities  that  he  brings  into  the  business,  would  be  the  amount  actually  in- 
vested by  him  in  the  business;  but  instead  of  crediting  him  with  his  resources  and  debiting  him 
with  his  liabilities,  we  simply  give  him  credit  for  the  difference  between  his  resources  and  his  lia- 
bilities (which  amounts  to  the  same  thing),  and  term  that  his  Net  Investment. 

If  the  business  for  which  the  books  are  kept  is  owned  by  one  person,  there  will  be  only  one 
Stock  account  and  sometimes  where  a  business  is  owned  by  two  or  more  partners,  only  one  Stock 
account  is  kept,  and  it  shows  the  entire  investment,  but  usually  a  separate  Stock  account  is  kept 
for  each  member  of  the  firm  when  a  business  is  owned  by  more  than  one  person,  and  in  that  event, 
each  person's  Stock  account  goes  by  his  own  name,  with  the  words  "Stock  Account"  added,  and 
shows  his  Net  Investment. 

If  there  is  but  one  Stock  account,  it  is  sometimes  kept  under  the  heading  "Capital"  or  under 
the  name  of  the  firm  instead  of  under  the  heading  "Stock  Account,"  but  no  matter  under  what 
heading  it  is  kept,  it  is  kept  for  the  same  purpose  and  in  the  same  way. 

As  has  been  stated  above,  a  Stock  account  for  the  firm  or  a  separate  Stock  account  for  each 
member  of  the  firm  is  opened  when  the  books  are  opened,  and  at  that  time  the  Stock  account  is 
credited  with  the  Net  Investment  of  the  person  for  whom  it  is  kept. 

If  at  any  time  the  person  for  whom  the  Stock  account  is  kept  withdraws  any  of  the  capital 
he  has  invested  in  the  business,  his  Stock  account  should  be  debited  for  the  amount  of  the  capital 
withdrawn  and  cash,  or  any  other  account  representing  what  he  withdraws,  should  be  credited 
for  the  same  amount. 

If  at  any  time  the  person  makes  any  additional  investment  in  the  business,  his  Stock  account 
should  be  credited  for  the  additional  investment  and  cash  or  any  other  account  representing  what 
he  invests,  should  be  debited  for  the  same  amount. 

Unless  the  person  for  whom  the  Stock  account  is  kept  either  invests  more  money  in  the  bus- 
iness or  withdraws  part  of  what  he  has  previously  invested,  there  is  no  occasion  to  make  any  entry 
to  the  Stock  account  until  the  books  are  closed.  The  Stock  account  stands  on  the  books  simply 
showing  the  amount  the  person  for  whom  it  is  kept  has  invested  in  the  business. 

For  an  illustration  of  Stock  accounts,  see  page  62.  The  entries  there  are  posted  from  the 
Journal,  page  59. 

WRITTEN  TEST  NO.  4. 

1.  When  you  wish  to  open  a  set  of  books,  what  should  be  done  first? 

2.  Where  should  the  first  entry  be  made,  and  of  what  should  it  consist? 

3.  The  resources  invested  in  the  business  should  be  posted  to  which  side  of  the  accounts 
to  which  they  belong?     Why? 

4.  The  liabilities  invested  in  the  business  should  be  posted  to  which  side  of  the  accounts 
to  which  they  belong?     Why? 

5.  How  is  the  net  investment  of  a  person  who  invests  both  resources  and  liabilities  found? 

6.  For  what  should  the  Stock  account  of  each  member  of  the  firm  be  credited? 

7.  If  cash  forms  all  or  part  of  his  investment,  to  which  side  of  the  Cash  Book  would  it  be 
posted,  and  how  would  the  entry  in  the  Cash  Book  be  balanced,  equalized  or  off-set? 

8.  If  a  stock  of  merchandise  forms  part  of  the  investment,  to  which  side  of  the  Merchandise 
account  would  it  be  posted,  and  how  would  the  entry  to  the  Merchandise  account  be  balanced? 


MODERN  BOOKKEEPING,   ACCOUNTING   AND  BUSINESS   PRACTICE.        57 

9.  If  store  and  office  fixtures  form  part  of  the  investment,  to  which  side  of  the  Store  and 
Office  Fixtures  account  would  their  value  be  posted,  and  how  would  the  entry  to  the  Store  and 
Office  Fixtures  account  be  balanced? 

10.  If  some  personal  accounts  due  one  of  the  firm  form  part  of  his  investment,  in  what 
accounts  would  they  appear,  and  how  would  the  entries  be  made? 

11.  If  some  personal  accounts  owed  by  one  of  the  firm  form  part  of  the  liabilities  he  invests 
in  the  business,  in  what  accounts  would  they  appear,  and  how  would  the  entries  be  made? 

12.  When  all  of  the  entries  have  been  made  for  opening  a  set  of  books,  for  what  purpose 
should  a  Trial  Balance  be  taken? 

13.  If  the  books  do  not  balance  after  all  of  the  entries  for  opening  a  set  of  books  have  been 
made,  what  does  that  prove?     What  must  be  done  in  that  event? 

14.  What  are  Stock  accounts  kept  for,  and  how  many  of  them  should  be  kept  in  each  set 
of  books? 

15.  When  should  Stock  accounts  be  credited,  and  for  how  much? 

16.  When  should  Stock  accounts  be  debited,  and  for  how  much? 

17.  What  does  the  Stock  account  for  each  member  of  the  firm  show? 

EXERCISES  FOR  PRACTICE  IN  OPENING  BOOKS. 

When  you  can  answer  satisfactorily  all  of  the  questions  in  Test  No.  4,  and  know  how  to  keep 
Stock  accounts,  and  how  to  make  the  entries  for  opening  a  set  of  books,  think  how  you  would  make 
the  Journal  entries  for  opening  a  set  of  books  for  the  Hardware  Business  of & 

(Student's  name) 

Trader,  Exercise  No.  8,  then  after  thinking  how  you  would  make  each  entry,  turn  to  the  Journal, 
page  59,  and  see  whether  it  is  made  just  as  you  thought  it  should  be.  When  you  have  thought  out 
all  of  the  Journal  entries,  and  verified  them,  turn  to  the  Journal  and  look  at  each  itemand think 
how  and  where  it  should  be  posted,  referring  to  the  Ledger,  pages  62  to  66,  after  deciding  about 
each  item,  to  see  whether  or  not  it  is  posted  just  where  and  in  the  way  you  thought  it  should  be 
posted.  After  having  thought  out  and  verified  all  of  the  postings,  take  a  Trial  Balance  and  see 
whether  the  books  balance,  and  whether  you  are  ready  to  proceed  with  the  recording  of  all  transac- 
tions according  to  the  principles  of  Double  Entry  Bookkeeping. 

•    After  the  above  work  has  been  done,  the  student  may  open  a  set  of  books  for  the  Hardware 
Business  of  &  Trader,  without  referring  to  the  illustration,  and  after 

(Student's  name) 

the  books  have  been  opened,  may  take  a  Trial  Balance  and  submit  the  work  to  the  teacher,  after 
which  Exercises  Nos.  9,  10,  and  11  may  be  written  up  and  submitted. 

EXERCISE  NO.  8. 

HARDWARE    BUSINESS. 

&  A.  E.  Trader  enter  into  partnership,  January  1,  19 — , 


(Student's  name) 

to  conduct  a  Wholesale  Hardware  Business,  the  firm  to  be  known  as 

(Student's  name) 

&  Trader.     Gains  and  losses  to  be  shared  equally. 
invests  cash,  $5,000. 

(Student's  name) 

A.  E.  Trader,  who  has  been  conducting  the  business  heretofore,  invests  cash,  506.17;  Mdse., 
per  inventory,  $3,324.81;  Store  and  Office  Fixtures,  $225;  Accounts  due  him  as  follows:  Miles 
Hdwe.  Co.,  $476.27;  Marshall,  Wescoat  &  Co.,  $362.45;  Sam'l  Emmert,  $572.72;  Young  Bros., 
$410.25;  J.  H.  Constantine,  $398.07;  Union  Hdwe.  Co.,  $272.50;  J.  R.  M.  Adams,  $315.30;  Frank 
Beall  &  Co.,  $405;  Pursey  &  Co.,  $257.55.  Accounts  owed  by  him,  as  follows:  National  Tool 
&  Stamping  Co.,  $789.83;  Maryland  Hinge  Co.,  $592.65;  Frank  B.  Sloan  &  Co.,  $342.18;  Wm.  H. 
Cole  &  Son,  $425.50;  Francis  Albert  &  Co.,  $375.93. 


58        MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

EXERCISE  NO.  9. 

DRUG    BUSINESS. 

and  A.  E.  Trader  enter  into  partnership,  Feb.  1,  19 — ,  to  conduct  a  Whole- 

(Student's  name) 


(Student's  name) 

sale  Drug  Business;  firm  to  be  known  as &  Trader;  gains  and  losses  to  be  shared 


equally. 

invests  cash,  $6,000. 

(Student's  name) 

A.  E.  Trader,  who  has  been  conducting  the  business  heretofore,  invests  in  cash,  $426.70; 
Mdse.,  as  per  inventory,  $3,846.27;  Store  and  Office  Fixtures,  $315;  Accounts  due  him  as  follows: 
Double  &  Co.,  $172.25;  S.  S.  Davis,  $375.60;  Oliver  P.  Robinson,  $272.15;  Jefferson  D.  Fore, 
$132.38;  Charles  H.  Brooke,  $362.75;  Ezekiel  Forman,  $154.48;  A.  O.  Pilson,  $372.63;  T.  E. 
Zimmerman  &  Co.,  $263.72;  D.  C.  Aughinbaugh  &  Son,  $184.89;  L.  N.  Meadows  &  Co.,  $323.65; 
Hall,  Atkinson  &  Co.,  $173.21;  and  Accounts  owed  by  him  as  follows:  Wyeth  Bros.,  $342.37; 
Gilbert  Bros.,  $345.65;  Sharp  &  Dohme,  $185.87;  Hance  Bros.  &  Wight,  $285.34;  Muth  Bros. 
&  Co.,  $216.45. 

EXERCISE  NO.  10. 

GENERAL   STORE. 

and  A.  E.  Trader  enter  into  partnership,  March  1,  19 — ,  to  conduct  a  retail 

(Student's  name) 

business  in  a  general  store.     Firm  to  be  known  as &  Trader.     Gains  and  losses 

(Student's  name) 

to  be  shared  equally. 

invests  cash,  $1,750. 

(Student's  name) 

A.  E.  Trader,  who  has  been  conducting  the  business  heretofore,  invests  in  cash  $314.29; 
Mdse.,  $1,425.73;  Store  and  Office  Fixtures,  $150;  Accounts  due  him  as  follows:  John  Lange, 
$25;  Sarah  Dennison,  $6.75;  G.  H.  Terrell,  $10.25;  W.  S.  Barnes,  $9.72;  Mrs.  J.  B.  Reed,  $12.40; 
Louis  P.  Doub,  $8.72;  L.  B.  Durant,  $20.15;  William  Wilson,  $10.05;  W.  S.  West,  $12.42;  James 
Beall,  $12.72;  Frank  Jones,  $18.68;  Mrs.  Jas.  Stotlemeyer,  $7.23;  George  F.  Crawford,  $25; 
Samuel  Wright,  $75;  Mrs.  Emma  G.  Crawford,  $18.75;  Jos.  L.  Purcell,  $10.95;  John  D.  Powell, 
$40.31;  George  W.  Baker,  $32.05;  David  C.  Hensell,  $7.23;  Mrs.  John  Harris,  $12.75;  Accounts 
owed  by  him  as  follows:  Silberman  &  Todes,  $125.;  D.  M.  Crabill,  $20.75;  Stickley  Milling  Co., 
$172.25;  Baltimore  Bargain  House,  $225.15. 

EXERCISE  NO.  11. 

GROCERY  BUSINESS. 

and  A.  E.  Trader  enter  into  partnership,  April  1, 19 — ,  to  conduct  a  wholesale 


(Student's  name) 

grocery  business,  firm  to  be  known  as &  Co.     Two-thirds  of  the  gains  or  losses 

(Student's  name) 

are  to  be  received  or  borne  by and  one-third  by  A.  E.  Trader. 

(Student's  name) 

invests    cash,   $1,050;   Mdse.,   $5,400;   Store   and   Office   Fixtures,   $840; 

(Student's  name) 

Accounts  due  him  as  follows:  Boyer  &  Co.,  $450.50;  Miller  &  Hartman,  $253.60;  and  L.  W. 
Johnson,  $165.40.  Accounts  owed  by  him  as  follows:  National  Biscuit  Co.,  $960;  and  C.  A. 
Gambrill  Mfg.  Co.,  $1,009.50. 

A.sE.  Trader  invests  cash,  $1,000;  Mdse.,  $3,500;  the  following  account  due  him:  Oscar 
Bear,  $242.56;  and  the  following  accounts  which  he  owes:  Thos.  G.  Cranwell  &  Co.,  $1,700;  and 
Woolson  Spice  Co.,  $42.56. 


JOURNAL. 


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MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        67 

PRIVATE  ACCOUNTS. 

52.  The  student  may  now  open  and  keep  a  set  of  books  for  the  wholesale  Grocery  Business 
of  &  Trader.     The  firm  is  composed  of  &  A.  E.  Trader,  who 

(Student's  name)  (Student's  name) 

have  invested  equal  amounts  and  are  to  share  the  gains  and  losses  equally.  The  accounts  to  be 
kept  are, — a  Stock  account  for  each  member  of  the  firm,  a  Cash  account,  a  Merchandise  account, 
a  Store  and  Office  Fixtures  account,  the  various  Personal  accounts  and  a  Private  account  for  each 
member  of  the  firm. 

53.  You  have  already  learned  how  to  keep  all  of  the  above  accounts  except  the  Private 
accounts,  one  of  which  is  kept  for  each  member  of  the  firm.  This  account  is  a  very  simple  affair. 
It  is  kept  to  show  what  each  member  of  the  firm  takes  from  the  business  for  his  own  private  use. 
One  of  the  accounts  should  be  headed Private  account  and  the  other  A.  E. 

(Student's  name) 

Trader's  Private  account.  If  either  member  of  the  firm  takes  any  money  for  his  own  private  use, 
his  private  account  should  be  debited  for  the  amount  taken,  and  this  debit  to  his  private  account 
should  be  balanced  by  a  credit  to  the  Cash  account  for  the  same  amount.  If  either  member 
of  the  firm  takes  goods  from  the  store  for  his  own  use,  his  Private  account  should  be  debited  for 
the  value  of  the  goods  (the  value  is  usually  figured  at  the  wholesale  price  or  at  what  they  cost 
the  firm)  and  that  debit  should  be  balanced  by  a  credit  to  the  Merchandise  account  for  the 
same  amount.  Sometimes  the  members  of  the  firm  allow  themselves  salaries,  and  in  such  cases 
the  Private  account  of  each  member  should  be  credited  at  the  time  the  salary  becomes  due, 
with  the  amount  allowed;  that  credit  being  balanced  by  just  the  same  kind  of  debit  as  would  be 
made  if  the  salary  were  due  some  one  who  had  no  connection  with  the  firm. 

With  the  above  information,  you  are  ready  to  proceed  and  show  how  the  books  of 
&  Trader  will  stand  at  the  close  of  the  business  described  below. 

(Student's  name) 

EXERCISE  NO  12. 

WHOLESALE    GROCERY    BUSINESS. 

JANUARY  28,  19—. 

On  this  date  invests  cash,  $17,000. 

(Student's  name) 

A.  E.  Trader  invests  Merchandise,  as  per  inventory,  $16,436.40;  Store  and  Office  Fixtures, 
on  hand  as  per  inventory,  $518;  Cash,  $1,047.53,  and  accounts  due  him  as  follows:  Bryant  & 
Clarvoe,  Grocers,  $179.63;  Jordan  Stabler  Co.,  Grocers,  $536;  McGaw  &  Co.,  Grocers,  $953.93; 
Gold  Bros.,  $150;  Reitz  Bros.,  $82.57;  Boyer  &  Co.,  $62.09,  and  the  following  accounts  which 
he  owes:  The  Woolson  Spice  Co.,  $398;  Thomas  G.  Cranwell  &  Co.,  Canned  Goods  Brokers, 
$795.40;  The  C.  A.  Gambrill  Mfg.  Co.,  $1,284;  The  National  Biscuit  Co.,  $486.75. 

THE  FIRM  TRANSACTS  THE  FOLLOWING  BUSINESS: 

JANUARY  28,  19—. 

Buy  of  Woolson  Spice  Co.,  on  account,  groceries  amounting  to  $1,804. 
Sell  to  Boyer  &  Co.,  on  account,  10  cases  Lion  Brand  Coffee  at  $2.50  per  case,  $25. 
Sell  to  Jordan  Stabler  Co.,  on  account,  25  bbls.  Gambrill's  Best  Flour  at  $4.40,  $110. 
Sell  to  Reitz  Bros.,  on  account,  8  boxes  Ivory  Soap  (large  size)  at  $6  per  box,  $48. 
Sell  to  Bryant  &  Clarvoe,  on  account,  12  cases  Quaker  Oats,  24  packages  to  the  case,  at  $2.25, 
$27. 


68        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS   PRACTICE. 

29. 

Sell  Gold  Bros.,  on  account,  30  bbls.  GambrilPs  Best  Flour  at  $4.40,  $132. 

Sell  Boyer  &  Co.,  on  account,  15  cases  Eagle  Brand  Tomatoes,  24  cans  to  the  case,  at  $1.50 
per  case,  $22.50. 

Sell  Jordan  Stabler  Co.,  on  account,  20  bbls.  granulated  sugar,  weight  6,851  lbs.,  at  5f  cents 
per  lb.,  $393.93. 

has  a  bbl.of  GambrilPs  Best  Flour,  wholesale,  $4,  and  5  lbs.  evaporated  peaches, 

(Student's  name.) 

wholesale  10^  per  lb.,  sent  to  his  home  for  his  own  use. 

30. 

Sell  to  John  T.  Bailey  for  cash,  12  bbls.  Gambrill's  Best  Flour  at  $4.40,  $52.80. 

Receive  from  Jordan  Stabler  Co.,  check  for  $503.93. 

Buy  10  bus.  oats  (for  the  horse)  at  42  cents  per  bu.,  $4.20. 

Pay  for  repairs  to  elevator,  $4.60. 

Pay  for  shoeing  horse,  $2.25. 

Sell  to  Wm.  Jackson,  on  account,  5  bbls.  granulated  sugar,  weighing  respectively  337,  353, 
340,  344,  and  342  lbs.,  at  5f  cents  per  lb.,  $98.67,  and  6  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl. 
$26.40,  total  $125.07. 

Sell  to  F.  W.  Johnson,  on  account,  100  lbs.  California  Evaporated  Peaches  at  12  cents  per 
lb.,  $12;  and  10  cases  Eagle  Brand  Corn,  24  cans  to  the  case,  at  $1.50  per  case,  $15,  total  $27. 

Send  Frank  Pughsley  check  for  putting  some  new  shelving  in  store,  $15.35. 

31. 

Sell  to  Reitz  Bros.,  on  account,  6  bbls.  Goldenrod  Syrup,  containing  respectively  48,  55,  57, 
45,  50,  and  53  gals.,  total  308  gals.,  at  32  cents  per  gal.,  $98.56. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  account,  200  bbls.  Gambrill's  Best  Flour  at  $4  per 
bbl.,  $800. 

Sell  to  Gold  Bros.,  on  account,  3  bbls.  cider  vinegar  at  $2.52  per  bbl.,  $7.56. 

Pay  for  repairs  to  wagon,  $3.25. 

Buy  of  National  Biscuit  Co.,  on  account,  300  cases  Uneeda  Biscuit  at  $1.75  per  case,  $525.00. 

A.  E.  Trader  draws  $100  for  his  own  private  use. 

Sell  Nogood  &  Bro.,  on  account,  12  cases  Eagle  Brand  Corn,  at  $1.50  per  case,  $18.00. 

FEBRUARY    1. 

Sell  Maynadier  &  Co.,  on  account,  25  cases  Uneeda  Biscuit  at  $2  per  case,  $50. 
Sell  Snare  &  Miley,  for  cash,  2  bbls.  granulated  sugar,  686  lbs.,  at  5|  cents  per  lb.,  $39.45. 
Buy  5  bu.  corn  for  horse  at  52  cents  per  bu.,  $2.60. 

Sell  Percy  M.  Reese,  on  account,  500  lbs.,  mixed  Mocha  &  Java  coffee  at  30  cents  per  lb., 
$150. 

Buy  2  bales  of  hay  for  horse  at  $1.10  per  bale,  $2.20. 

2. 

Send  National  Biscuit  Co.,  check  for  $100. 

Send  Consolidated  Gas  Co.,  check  for  January  gas  bill,  $12.25. 
Receive  from  Reitz  Bros.,  check  for  $125. 
Receive  from  Boyer  &  Co.,  check  for  $22.50. 

Buy  from  J.  A.  Edmondson  &  Son,  for  cash,  (check)  groceries  amounting  to  $326.84. 
Sell  Bryant  &  Clarvoe,  on  account,  2  doz.  cases  Eagle  Brand  Corn  at  $1.50  per  case,  $36. 
Buy  from  Woolson  Spice  Co.,  on  account,  100  cases  Lion  Brand  Coffee,  at  $2.12|  per  case, 
$212.50. 


MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        69 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  account,  50  bbls.  Superior  Family  Flour  at  $3.75  per 
bbl.,  $187.50. 

Sell  Snyder  &  Co.,  on  account,  3  bbls.  granulated  sugar,  weighing  339,  346,  336  lbs.,  total 
1,021  lbs.,  at  5f  cents  per  lb.,  $58.71. 

Sell  to  Gold  Bros.,  on  account,  6  bbls.  GambrilPs  Best  Flour  at  $4.40  per  bbl.,  $26.40. 

Sell  to  Reitz  Bros.,  on  account,  15  cases  Uneeda  Biscuit  at  $2  per  case,  $30. 

Pay  for  advertisement  in  the  "Inquirer,"  $14.50;  for  5  tons  coal,  $23;  for  bill  of  stationery 
$6.25;  for  policy  in  the  Maryland  Fire  Insurance  Co.,  3  years'  premium  on  $10,000,  $60. 

A.  E.  Trader  has  a  bbl.  of  sugar,  341  lbs.,  wholesale  5|j£  per  lb.,  sent  home. 

After  recording  and  posting  all  the  transactions  above  referred  to,  take  a  Trial  Balance. 

Nogood  Bros.,  to  whom  we  sold  a  bill  of  goods  on  Jan.  31,  failed  and  are  unable  to  pay  any 
of  their  debts. 

At  the  close  of  business,  Feb.  2,  the  inventories  are  as  follows:  Mdse.  on  hand,  $19,123.85; 
Store  and  Office  Fixtures  on  hand,  $533.35. 

What  is  the  cash  on  hand  according  to  your  books? 

What  was  the  net  private  loss  or  gain  of  each  member  of  the  firm?     (See  articles  54  to  69.) 

How  much  does  each  have  invested  in  the  business  on  the  morning  of  Feb.  3,  19 — . 

CLOSING    BOOKS. 

54.  A  Trial  Balance  is  always  taken  before  the  books  are  closed,  and  if  the  books  do  not 
balance,  all  the  mistakes  in  them  must  be  found  and  corrected,  so  that  the  books  will  balance  be- 
fore the  bookkeeper  proceeds. 

When  you  add  any  account  or  column  of  figures  always  place  the  total  in  small  pencil  figures 
right  up  against  the  bottom  of  the  line  on  which  the  last  entry  rests.     Use  a  sharp,  hard  pencil. 

The  books  of  nearly  all  progressive  firms  are  closed  once  a  year  or  oftener,  to  show  the  con- 
dition of  the  business  and  to  show  how  much  money  the  firm  is  making  or  losing. 

55.  When  the  books  are  to  be  closed,  the  first  thing  to  do  is  to  open  another  account,  called 
the  Loss  &  Gain  Account,  upon  the  debit  side  of  which  must  be  placed  the  amount  of  loss  from  all 
accounts  on  which  there  has  been  a  loss,  and  upon  the  credit  side  of  which  must  be  placed  the 
amount  of  gain  from  all  accounts  on  which  there  has  been  a  gain,  since  the  books  were  opened  or 
since  they  were  last  closed.  Ordinarily  there  will  be  a  loss  or  a  gain  on  every  account  in  the  books 
except  the  Stock  accounts,  the  Private  accounts,  the  Bills  Payable  account,  the  Bills  Receivable 
account,  and  a  majority  of  the  Personal  accounts.  There  is  a  loss  on  any  Personal  account  due 
us,  which  the  person  owing  us  will  not  pay,  and  which  cannot  be  collected  by  legal  process  or  other- 
wise and  which  consequently  we  will  not  get.  The  bookkeeper  should  look  at  every  account  in 
the  Ledger  to  see  whether  there  is  a  loss  or  a  gain  on  it,  and  if  there  is,  he  should  close  it  into  the 
Loss  and  Gain  account.  He  will  probably  come  to  the  Stock  accounts  first  and  then  to  the  Pri- 
vate accounts,  and  since  the  firm  neither  loses  nor  gains  on  them,  he  does  nothing  with  them.  He 
next  comes  to  the  Merchandise  account.  In  order  to  ascertain  whether  the  firm  has  lost  or  gained 
on  it,  an  inventory  should  be  taken  to  show  the  value  of  the  merchandise  on  hand ;  this  having  been 
done,  the  bookkeeper  writes  in  red  ink  on  the  credit  side  of  the  Merchandise  account  in  the  ex- 
planation column  of  the  Ledger,  "Inventory"  and  in  the  money  column  the  value  of  the  merchan- 
dise on  hand.  This  credit  is  balanced  a  little  later  on  after  the  closing  lines  have  been  drawn, 
by  writing  in  black  ink  on  the  debit  side  of  the  Merchandise  account  in  the  Ledger,  "Inventory" 
and  the  same  amount,  so  that  the  books  are  not  thrown  out  of  balance.  After  making  the  "In- 
ventory" credit  to  the  Merchandise  account,  the  bookkeeper  adds  both  sides  of  the  account  and 
then  to  find  the  loss  or  the  gain,  he  subtracts  the  smaller  side  from  the  larger.  If  the  credit  side 
of  the  account  is  the  larger,  the  amount  it  exceeds  the  debit  side  is  the  amount  of  gain  on  the  Mer- 
chandise account.  If  the  debit  side  of  theMerchan  is  account  isthelarger,  the  amount itex- 
ceeds  the  credit  side  is  the  amount  of  loss  on  the  Merchandise  account. 


70        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

CLOSING  ENTRIES. 

56.  The  bookkeeper,  having  determined  whether  there  is  loss  or  a  gain  on  the  account,  next 
makes  an  entry  in  the  Journal  which,  when  posted,  will  close,  or  balance,  the  Merchandise  account 
and  cause  the  amount  of  gain  or  loss  on  this  account  to  show  in  the  Loss  and  Gain  account.  When 
the  credit  side  of  the  Merchandise  account  is  the  larger  after  the  Inventory  has  been  added,  to 
close  the  account  the  Journal  entry  should  read,  "Merchandise  to  Loss  &  Gain."  Should  the 
debit  side  be  the  larger  after  the  Inventory  is  added  to  the  credit  side,  the  entry  should  read  "Loss 
and  Gain  to  Merchandise."  The  entry  is  posted  just  the  same  as  any  other  Journal  entry.  In 
the  Merchandise  account  the  explanation  is  "Loss  and  Gain,"  in  the  Loss  and  Gain  account  the 
explanation  is  "Merchandise."  For  an  illustration  of  the  Journal  entry  closing  the  Merchandise 
account  and  the  same  posted  to  the  Merchandise  and  to  the  Loss  and  Gain  account,  see  pages 
75,  77  and  82. 

After  the  bookkeeper  has  posted  the  Journal  closing  entry  as  directed,  the  Merchandise  ac- 
count will  balance;  that  is,  both  sides  will  be  equal.  The  bookkeeper  next  rules  the  closing  lines, 
puts  in  the  footings  of  the  columns  and  that  account  is  closed.  Then  he  brings  down  on  the  debit 
side  in  black  ink  his  entry  "Inventory"  with  the  amount,  and  then  the  account  is  ready  for  the 
resumption  of  business  after  the  books  have  been  closed.  For  an  illustration  of  the  closing  lines 
with  the  footing  between  them  and  all  the  entries  made  to  the  Merchandise  account,  see  Mer- 
chandise account  in  the  Ledger,  page  77. 

57.  The  next  account  the  bookkeeper  reaches  is  probably  the  Store  and  Office  Fixtures 
account.  There  again  an  inventory  must  be  handled.  The  account  must  be  credited  in  red  ink 
for  the  value  of  the  store  and  office  fixtures  on  hand  with  the  explanation  "Inventory"  and  that 
credit  must  be  balanced  by  a  debit  "Inventory"  for  the  same  amount,  which  will  appear  below  the 
closing  lines  of  the  account.  After  the  account  has  been  credited  with  the  "Inventory"  the  book- 
keeper adds  both  sides  of  the  account,  and  the  amount  that  the  debit  side  exceeds  the  credit  side 
is  the  amount  that  has  been  lost  on  store  and  office  fixtures.  The  Journal  entry  for  this  should 
read  "Loss  and  Gain  to  Store  and  Office  Fixtures."  The  explanation  in  the  Loss  and  Gain  ac- 
count will  be  "Store  and  Office  Fixtures"  and  in  the  Store  and  Office  Fixtures  account,  "Loss  and 
Gain."  After  this  Journal  entry  has  been  posted,  both  sides  of  the  account  will  be  alike — the 
account  will  be  in  balance — and  the  bookkeeper  after  ruling  his  closing  lines,  will  bring  down  his 
entry  "Inventory"  and  the  amount  Upon  the  debit  side  just  below  the  closing  lines  and  the  ac- 
count is  then  ready  for  business  to  proceed  after  the  books  have  been  closed. 

58.  The  bookkeeper  next  comes  to  the  Expense  account,  which  is  treated  just  the  same  as 
the  Store  and  Office  Fixtures  account  has  been  treated.  If  there  is  anything  on  hand  which,  when 
purchased,  was  charged  to  the  Expense  account,  such  as  postage  stamps,  fuel,  or  supplies  of  any 
kind,  the  inventory  or  "account  of  stock,"  of  these  items  may  be  taken,  and  the  account  credited 
in  red  ink  for  the  value  on  hand,  with  the  explanation  "  Inventory;"  this  credit  will  be  balanced  by 
a  debit,  "Inventory,"  for  the  same  amount,  which  will  be  made  below  the  closing  lines  after  the 
account  has  been  closed.  After  the  "Inventory"  entry  has  been  added,  the  amount  which  the 
debit  side  exceeds  the  credit  side  is  the  amount  of  loss  on  the  Expense  account.  The  Journal 
entry  for  this  should  read  "Loss  and  Gain  to  Expense"  the  explanation  in  the  Loss  and  Gain  ac- 
count will  be  "Expense"  and  in  the  Expense  account  "Loss  and  Gain." 

After  this  Journal  entry  has  been  posted,  both  sides  of  the  account  will  be  equal,  and  the 
bookkeeper,  after  ruling  the  closing  lines,  will  make  his  entry,  "Inventory"  and  the  amount,  upon 
the  debit  side  of  the  account  below  the  closing  lines.  The  account  is  then  ready  for  business  again 
after  the  books  have  been  closed. 

If  the  articles  purchased  and  charged  to  the  Expense  account  have  all  been  used  up,  there 
will  be  nothing  to  inventory  and  in  that  case,  the  Journal  entry  "Loss  and  Gain  to  Expense"  will 
be  for  the  total  amount  shown  on  the  debit  side  of  the  Expense  account  and  of  course  there  will 
be  no  inventory  item  to  bring  down  on  the  debit  side  of  the  account  after  the  account  has  been 
closed. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        71 

59.  If  instead  of  having  just  the  Merchandise  account,  as  in  this  set  of  books,  on  which  gains 
are  made,  the  books  you  are  keeping  have  a  number  of  such  accounts,  they  should  all  be  closed 
just  as  the  Merchandise  account  is  closed  in  this  set. 

60.  Ordinarily  the  expenses  of  a  business  are  grouped  under  several  different  headings,  such 
as  Salaries,  Rent,  Advertising,  Freight  and  Express,  Interest,  Teams  and  Wagons,  Stable  and 
Garage  Expense,  and  various  other  headings  to  meet  the  needs  of  the  particular  business  for  which 
the  books  are  kept,  and  an  account  is  kept  with  each  kind  of  expense  instead  of  having  all  of  the 
expenses  thrown  together  under  the  heading  "Expense,"  as  in  this  set.  However,  in  such  cases 
each  of  these  accounts  is  closed  just  as  the  Expense  account  is  closed  in  this  set  of  books. 

61.  If  in  looking  over  the  Personal  accounts,  the  bookkeeper  finds  one  that  is  worthless  or 
one  on  which  there  is  a  loss,  it  should  be  credited  and  the  Loss  and  Gain  account  debited  for  the 
amount  of  the  loss.  The  proper  Journal  entry  in  such  a  case  is  "Loss  and  Gain  to  (Name  of  the 
Personal  account)."  After  this  Journal  entry  has  been  posted,  the  Personal  account  may  be  ruled 
shut  and  closed  just  like  any  other  account. 

62.  After  all  of  the  accounts  on  which  losses  and  gains  have  been  made  have  been  closed  into 
the  Loss  and  Gain  account,  the  bookkeeper  finds  out  the  difference  between  the  two  sides  of  that 
account.  If  the  credit  side,  which  shows  income  or  gain,  is  the  1  arger,  then  the  amount  that  it 
exceeds  the  debit  side,  is  the  amount  of  net  gain  in  the  business  since  the  books  were  opened  or 
since  they  were  last  closed.  If  the  business  is  run  by  a  single  proprietor,  his  Private  account 
should  be  credited  for  the  amount  of  the  gain,  and  the  Loss  and  Gain  account  should  be  debited 
for  the  same  amount  with  the  explanation  "Proprietor's  Private  account"  (using  the  man's  name 
instead  of  "Proprietor"  if  the  account  appears  in  his  name  in  the  Ledger).  The  Journal  entry  in 
this  case  is  "Loss  and  Gain  to  Proprietor's  Private  account." 

63.  If  there  are  two  or  more  owners  of  the  business,  the  amount  of  gain  should  be  appor- 
tioned between  them  according  to  the  terms  agreed  upon  when  they  entered  the  business,  and 
each  man's  Private  account  should  be  credited  for  his  share  of  the  gain,  and  the  Loss  and  Gain 
account  should  be  debited  for  the  same  amount,  with  the  man's  name  and  Private  account"  as 
the  explanation  in  the  Loss  and  Gain  account.  The  form  of  the  Journal  entry  in  the  case  of  two 
partners  is  the  same  as  though  there  were  a  single  proprietor; — "Loss  and  Gain  to  Proprietor's 
Private  account."  After  the  Journal  entry  for  each  of  the  partners  has  been  posted,  the  Loss 
and  Gam  account  will  balance  and  the  bookkeeper  should  rule  the  closing  lines  and  bring  down 
the  footings  between  them,  and  he  is  then  through  with  that  account. 

64  Of  course,  if  there  has  been  a  loss  instead  of  a  gain,  the  proceedings  of  the  bookkeeper 
will  be  just  the  same,  except  that  the  entries  will  be  on  the  opposite  sides  of  the  accounts.  In 
that  event,  the  amount  that  the  debit  side  of  the  Loss  and  Gain  account  exceeds  the  credit  side,  is 
the  amount  of  the  net  loss  for  the  period.  The  loss  should  be  apportioned  according  to  the  terms 
of  the  agreement  between  the  members  of  the  firm,  and  each  man's  private  account  should  be 
debited  for  his  share  of  the  loss,  and  the  Loss  and  Gain  account  should  be  credited  for  like  amounts, 
with  the  name  of  each  person  and  "Private  account"  as  the  explanation.  The  Journal  entry  in 
this  case  would  be  "Proprietor's  Private  account  to  Loss  and  Gain."  After  these  entries  are 
properly  posted,  the  account  will  balance  and  should  be  closed  the  same  as  in  the  other  case. 

65  After  the  Loss  and  Gain  account  has  been  closed,  the  only  accounts  remaining  open 
to  be  closed  are  the  Private  accounts  and  the  Stock  accounts.  The  difference  between  the  credit 
side  and  debit  side  of  each  Private  account  is  found,  and  if  the  credit  side  of  the  account  exceeds 
the  debit  side,  the  amount  of  excess  is  the  Net  Private  Gain  and  the  Private  account  of  the  per- 
son should  be  debited  for  the  amount  gained,  with  the  explanation  "Proprietor's  Stock  ac- 
count." To  balance  this  debit  to  the  Private  account,  a  credit  to  the  Stock  account  for  the  same 
amount  should  be  made,  with  the  explanation  "Net  Private  Gain."  The  Journal  entry  is, — 
Private  account  to  Proprietor's  Stock  account.  After  this  entry  has  heen  posted  the  Private 
account  will  balance,  and  should  be  ruled  up  and  the  footings  put  in.  On  the  other  hand,  if  the 
debit  side  of  the  Private  account  exceeds  the  credit  side,  the  excess  is  the  Net  Private  Loss  and  in 
this  case  the  Private  account  of  the  person  should  be  credited  for  the  amount  of  the  loss,  with 
the  explanation  "Proprietor's  Stock  account."     To  balance  this  credit  to  the  Private  account,  a 


72        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS   PRACTICE. 

debit  to  his  stock  account  for  the  same  amount  should  be  made,  with  the  explanation  "Net  pri- 
vate loss."  The  proper  Journal  entry  in  this  case  is  "Proprietor's  Stock  account  to  Proprietor's 
Private  account."  After  this  entry  has  been  posted,  the  Private  account  will  balance,  and  should 
be  ruled  up  and  the  footings  put  in.  If  there  is  more  than  one  Private  account,  each  of  them 
should  be  closed  in  the  same  way. 

66.  To  close  a  Stock  account,  it  is  only  necessary  to  write  on  the  debit  side  in  red  ink,  "Bal- 
ance" or  Present  Worth  for  the  amount  that  the  credit  side  exceeds  the  debit  side,  rule  the  closing 
lines  and  bring  down  the  footings,  then  to  balance  the  red  ink  entry  on  the  debit  side  of  the  Stock 
account,  bring  down  below  the  closing  lines  on  the  credit  side  of  that  account  the  same  amount 
with  the  explanation  "Present  Worth."  This  will  be  the  amount  that  the  member  of  the  firm 
now  has  invested  in  the  business.  If  there  is  more  than  one  Stock  account,  each  of  them  should 
be  closed  in  the  same  way. 

67.  After  all  of  the  Private  and  Stock  accounts  have  been  closed  as  directed,  the  books  have 
been  closed,  and  if  everything  has  been  done  properly,  the  books  will  balance  and  are  ready  for 
the  bookkeeper  to  proceed  to  enter  future  business.  After  closing  the  books,  always  take  a  Trial 
Balance  to  be  sure  that  the  books  balance,  before  you  start  out  to  record  the  business  of  the  next 
fiscal  period.  This  period  may  be  of  almost  any  length.  Some  firms  close  their  books  thirteen 
times  a  year, — every  four  weeks  or  28  days;  others  every  month;  some,  quarterly;  others  half- 
yearly,  and  others  only  once  a  year. 

68.  Note  that  in  closing  books  the  only  entries  made  in  red  ink  are  those  which  are  made 
directly  on  the  Ledger  without  being  posted  from  the  Journal,  Cash  Book  or  any  other  book  of 
original  entry, — such  entries  as  the  Inventories  of  the  various  accounts,  and  the  present  worth  in 
closing  the  stock  accounts. 

Another  good  use  for  red  ink  is  in  crediting  any  personal  account  on  which  there  is  a  loss. 
If  the  person  should  ever  wish  to  reopen  the  account,  the  red  ink  entry  acts  as  a  warning  signal 
and  brings  to  your  attention  the  manner  in  which  the  account  was  closed,  which  you  may  have 
forgotten  if  considerable  time  has  elapsed. 

The  ruling  in  ruling  up  accounts  or  in  closing  books  should  be  done  with  red  ink. 

While  we  suggest  the  use  of  black  ink  for  bringing  down  inventories  and  balances  below  the 
c  osing  lines  when  books  are  closed,  some  authorities  recommend  the  use  of  red  ink  for  this.  The 
practice  of  bookkeepers  and  accountants  on  this  point  is  not  uniform.  If  your  superior  has  a 
plreference,  follow  it. 

SIX  COLUMN  STATEMENT.     (WORKING  SHEET.) 

69.  When  the  books  are  to  be  closed,  it  is  well  first  to  make  a  Six  Column  Statement  and  to 
use  it  as  a  chart  or  guide  in  closing  the  books.  Such  a  statement  written  up  for  exercise  twelve 
is  shown  on  page  73.  The  first  two  columns  toward  the  left,  headed  respectively  "Debits"  and 
"Credits,"  show  the  face  of  the  Ledger  as  shown  by  a  trial  balance  taken  before  the  books  are 
closed.  The  third  and  fourth  columns,  headed  respectively,  "Losses"  and  "Gains,"  show  the 
entries  to  be  made  in  the  Loss  and  Gain  account  as  they  will  appear  after  the  Ledger  has  been 
closed.  The  fifth  and  sixth  columns,  headed  respectively  "Resources"  and  "Liabilities,"  show 
the  face  of  the  Ledger  as  it  will  appear  in  a  trial  balance  taken  after  the  books  have  been  closed. 

Note  and  memorize  the  fact  that  whenever  the  debit  side  of  an  account  exceeds  the  credit 
side,  the  excess  is  either  a  loss  or  a  resource,  and  that  whenever  the  credit  side  of  an  account 
exceeds  the  debit  side,  the  excess  is  either  a  gain  or  a  liability. 

While  it  is  best  to  take  a  trial  balance  after  the  books  have  been  closed,  sometimes  this  is 
not  done,  and  in  such  cases  the  bookkeeper  should  be  especially  careful  to  see  that  the  balances  of 
the  business  accounts  in  the  Ledger  agree  with  the  amounts  representing  those  accounts  in  the 
fifth  and  sixth  columns  of  the  "Six  Column  Statement."  In  making  this  comparison,  it  is  well  to 
check  the  resources  and  liabilities  on  the  Six  Column  Statement,  as  the  Ledger  accounts  are  found 
correctly  closed. 

By  following  the  Six  Column  Statement  closely,  the  bookkeeper  will  find  it  very  easy  to  make 
the  closing  entries  and  close  the  most  complicated  set  of  books. 


SIX  COLUMN  STATEMENT. 


73 


L.  F, 


Accounts 


Debits 


Credits 


Losses 


Gains 


Resources   R    Liabilities 


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74        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

WRITTEN  TEST  NO.  5. 

1.  What  are  Private  accounts  kept  for,  and  how  many  of  them  are  usually  kept  in  each  set 
of  books? 

2.  When  are  Private  accounts  debited,  and  what  entries  are  made  to  balance  the  debits  to 
Private  accounts? 

3.  Under  what  circumstances  should  Private  accounts  be  credited  and  for  how  much?    By 
what  debits  should  such  credits  be  balanced? 

4.  What  are  books  closed  for?    Usually  how  often? 

5.  What  should  be  done  before  the  books  are  closed?     If  they  do  not  balance,  what  then? 

6.  What  is  carried  into  the  Loss  and  Gain  account? 

7.  On  which  side  of  the  Loss  and  Gain  account  should  all  the  losses  appear? 

8.  Name  and  describe  the  accounts,  or  kinds  of  accounts,  on  which  there  are  likely  to  be 
losses  and  gains,  and  those  on  which  there  are  not. 

9.  When  is  there  a  loss  on  a  Personal  account? 

10.  Describe  all  the  entries  you  would  make  in  closing  a  Merchandise  account,  or  any  similar 
account  on  which  there  has  been  a  loss.     A  gain. 

11.  Describe  the  entries  you  would  be  likely  to  have  occasion  to  make  in  closing  a  Store 
and  Office  Fixtures  account? 

12.  Describe  the  different  methods  of  closing  an  Expense  account. 

13.  Describe  the  entries  you  would  make  in  closing  a  Personal  account  on  which  there  was 
a  loss. 

14.  Describe  the  entries  for  closing  a  Loss  and  Gain  account  when  the  gains  exceed  the 
losses,  and  also  when  the  losses  exceed  the  gains. 

15.  Describe  the  entries  for  closing  a  Private  account  when  there  is  a  gain  on  it,  and  when 
there  is  a  loss  on  it. 

16.  Describe  the  entries  for  closing  a  Stock  account. 

17.  Why  is  red  ink  used  in  making  the  entries  in  which  it  is  used  in  closing  books? 

18.  When  a  set  of  books  has  been  closed,  what  should  be  done  before  anything  else  is 
entered  in  them?     Why? 

19.  What  will  the  credit  side  of  each  Stock  account  show  after  a  set  of  books  has  been  closed 
When  the  student  has  so  thoroughly  mastered  the  instructions  in  this  lesson  that  he  can  give 

the  information  above  asked  for,  he  may  make  a  Six  Column  Statement  and  then  close  the  books 
for  the  Wholesale  Grocery  Business  of &  Co.,  which  he  is  directed  at  the  beginning 

(Student's  name) 

of  this  lesson  to  keep,  and  may  give  the  net  private  loss  or  gain  of  each  member  of  the  firm,  and 
the  amount  of  each  Stock  account  on  the  morning  of  Feb.  3,  19 — .  The  Six  Column  Statement 
should  be  submittted  to  the  teacher  before  the  closing  entries  are  made  on  the  books. 


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MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        83 

EXERCISES  FOR  PRACTICE  IN  KEEPING  AND  CLOSING  BOOKS. 

EXERCISE  NO.  13. 

HARDWARE    BUSINESS. 

The  student  may  now  open,  keep  and  close  a  set  of  books  for  the  Wholesale  Hardware  Bus- 
iness of &  Trader,  who  have  entered  into  partnership  on  February  4th,  19 — ,  with 

(Student's  name) 

investments  as  follows: 

invests  cash,  $26,000. 


(Student's  name) 

A.  E.  Trader  invests  cash,  $363.09  and  Merchandise,  per  inventory,  $23,752.80;  Store  and 
Office  Fixtures,  per  inventory,  $839;  accounts  due  him  as  follows:  Miles  Hardware  Co.,  $476.27; 
Marshall,  Wescoat  &  Co.,  $362.45;  Samuel  Emmert,  $572.72;  Young  Bros.,  $410.25;  J.  H.  Constan- 
tine,  $398.96;  Union  Hardware  Co.,  $272.50;  J.  R.  M.  Adams,  $315.50;  Frank  Beall  &  Co.,  $405; 
C.  C.  Pursey  &  Co.,  $257.55;  and  the  following  accounts  which  he  owes:  National  Tool  &  Stamp- 
ing Co.,  $689.83;  the  Maryland  Hinge  Co.,  $592.65;  Frank  B.  Sloan  &  Co.,  $342.18;  Wm.  H.  Cole 
&  Son,  $425.50;  Francis  Albert  &  Co.,  $375.93. 

FEBRUARY  4. 

Sell  Balto.  Hdwe.  Co.,  on  %,  2  doz.  vestibule  latches  at  $15.80,  $31.60. 

Sell  C.  C.  Pursey  &  Co.,  on  %,  25  doz.  pairs  fiat  hinges  at  $4.00,  $100 

Receive  from  Miles  Hdwe.  Co.,  on  %,  check  for  $250. 

has  a  set  of  knives  and  forks,  wholesale  price,  $9,  and  tools  amounting  to  $5.37 

(Student's  name) 

(wholesale)  sent  to  his  home. 

Sell  Miles  Hdwe.  Co.,  on  %,  12  doz.  pairs  shutter  hinges  at  $2  and  6  doz.  Perfect  Door  Springs 
at  $1.25,  total  $31.50. 

Sell  to  Young  Bros.,  on  %,  30  doz.  letter  box  plates  at  $9,  $270. 
Pay  Himmel  &  Co.,  for  new  show  case,  $50. 
■   Send  check  to  National  Tool  &  Stamping  Co.,  on  %,  $125.60. 
Pay  gas  bill,  $15.60. 
Cash  sales,  $36.24. 

FEBRUARY  5. 

Sell  Marshall,  Wescoat  &  Co.,  on  %,  500  ornamental  figures  at  30c,  $150. 

A.  E.  Trader  has  $15  worth  of  wire  netting  sent  to  his  farm. 

Buy  from  Francis  Albert  &  Co.,  on  %,  24  gross  hotel  coat  hooks  at  $5.50,  $132. 

Sell  Samuel  Emmert  for  cash  18  doz.  shelf  brackets  at  $3.00,  $54. 

Receive  check  from  Miles  Hdwe.  Co.,  on  %,  $42.50. 

Pay  Maryland  Hinge  Co.,  on  %,  $135.64. 

Receive  check  from  Marshall,  Wescoat  &  Co.,  on  %,  $148.50. 

Buy  from  National  Tool  &  Stamping  Co.,  on  %,  15  doz.  saw  vises  at  $20,  $300. 

Pay  janitor  $5. 

Receive  from  Young  Bros.,  on  %,  check  for  $198.25. 

Sell  J.  H.  Constantine,  on  %,  25  doz.  pocket  balances  at  $1.50,  $37.50. 

Pay  freight  $5.25. 

Cash  sales  $123.40. 


84        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

FEBRUARY  6. 

Receive  from  Samuel  Emmert,  on  %,  $75. 

Sell  J.  R.  M.  Adams,  on  %,  12  doz.  screw  drivers  at  $2.50,  $30. 

Buy  from  Frank  B.  Sloan  &  Co.,  on  %,  36  iron  planes  at  85c,  1  doz.  Gem  Food  Choppers  at 
$37,  total  $67.60. 

Sell  Frank  Beall  &  Co.,  on  %,  10  jack  screws  at  $8.50,  2  doz.  blacksmiths'  hammers  at  $20, 
total  $125. 

Pay  Frank  B.  Sloan  &  Co.,  on  %,  $78.30. 

Take  one  bench  vise  from  stock  to  use  in  store,  $10. 

Pay  subscription  to  "Hardware  Journal,"  $3.00. 

Send  check  to  Francis  Albert  &  Co.,  on  %,  $125. 

Send  J.  C.  Bailey,  on  %,  12  cross-cut  saws  at  $4, 

Sell  Geo.  Keller,  on  %,  12  sets  steel  chisels  at  $7, 

Pay  for  stamps,  $2. 


Cash  sales  $15.40. 


FEBRUARY  7. 


Sell  to  J.  W.  Russell,  on  %,  1  doz.  store  door  handles,  $29. 
Receive  from  J.  C.  Bailey,  on  %,  $48. 
Pay  for  having  sign  repaired  $12. 
Send  check  to  Frank  B.  Sloan  &  Co.,  on  %,  $75. 
Pay  clerk  $8. 

Sell  Miller  Supply  Co.,  on  %,  2  doz.  push  plates  at  $5,  |  doz.  large  door  pulls  at  $65,  $42.50. 
Pay  Francis  Albert  &  Co.,  on  %,  $175. 

Sell  Oscar  Bear,  for  cash,  6  doz.  Defiance  Sash  Fasteners  at  $1.00,  4  doz.  hitching  rings,  at 
.80,  $13.20. 
Receive  from  J.  R.  M.  Adams,  on  %,  $56. 
Pay  for  stationery,  $12.00 
Receive  from  J.  H.  Constantine,  $125.25. 

Buy  from  Anderson  &  Ireland,  for  cash,  5  bench  vises  at  $10,  $50. 
Sell  Young  Bros.,  on  %  2  doz.  rip  saws  at  $38,  $76. 
Pay  National  Tool  &  Stamping  Co.,  on  %,  $600. 
Receive  from  Baltimore  Hdwe.  Co.,  on  %,  $25. 
Cash  sales,  $29.42. 
At  the  close  of  business,  Feb.  7,  the  inventories  are  as  follows: 

Merchandise  on  hand $23,463.43. 

Store  and  Office  Fixtures 890.00. 

What  is  the  cash  on  hand  according  to  your  books? 

What  was  the  net  private  gain  or  loss  of  each  member  of  the  firm? 

How  much  does  each  have  invested  in  the  business  on  the  morning  of  Feb.  8th? 


MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        85 

EXERCISE  NO.   14. 

DRUG    BUSINESS. 

The  student  may  open,  keep,  and  close  a  set  of  books  for  the  Wholesale  Drug  Business  of 
&  Trader,  who  have  entered  into  partnership  on  Feb.  8,  with  investments  as 


(Student's  name) 

follows: 


A.  E.  Trader  invests  cash,  $756.72.  Store  and  Office  Fixtures,  per  inventory,  $680;  Mer- 
chandise, per  inventory,  $10,151.25;  and  accounts  due  him  as  follows:  Double  &  Co.,  Druggists, 
$172.25;  S.  S.  Davis,  Druggist,  $375.60;  Oliver  P.  Robinson,  Druggist,  $272.15;  Jefferson  D.  Fore, 
Druggist,  $132.38;  Chas.  H.  Brooke,  Druggist,  $362.75;  Ezekiel  Forman,  Druggist,  $154.48;  A.  0. 
Pilson,  Druggist,  $372.63;  T.  E.  Zimmerman  &  Co.,  Druggists,  $263.72;  D.  C.  Aughinbaugh  & 
Son,  Druggists,  $184.89;  L.  N.  Meadows  &  Co.,  Druggists,  $323.65;  Hall,  Atkinson  &  Co.,  Drug- 
gists, $173.21;  and  the  following  accounts  which  he  owes:  Muth  Bros.  &  Co.,  Wholesale  Druggists, 
$216.45;  Wyeth  Bros.,  Wholesale  Druggists,  $342.37;  Gilbert  Bros.,  Druggists,  $345.68;  Sharp  & 
Dohme,  Manufacturing  Chemists,  $185.87;  Hance  Bros.  &  Wight,  Wholesale  Druggists,  $285.31. 
invests  cash,  $13,000. 

(Mudent's  name) 

8. 

Sell  Ezekiel  Forman,  on  %,  24  doz.  pts.  Red  Label  Carbolic  Acid,  at  $1.50,  24  doz.  \  pts.  White 
Solution  Carbolic  Acid,  $1.25,  $66. 

Pay  for  a  new  mirror  in  store,  $65. 

Pay  for  labels,  $15. 

Sell  to  S.  S.  Davis,  on  %  10  jugs  imported  Bay  Rum,  at  $3.75,  $37.50. 

Pay  for  stamps,  $5. 

Sell  to  John  Lang,  on  %,  24  doz.  bottles  Witch  Hazel  at  $1.25,  $30. 

Buy  from  Hall,  Headington  &  Co.,  on  %,  desk  for  office,  $45. 

Sell  John  D.  Stotlemeyer,  on  %,  25  lbs.  Lightning  Insect  Powder  at  30^,  $7.50, 10  cases  Tangle- 
foot Fly  Paper  at  $2.80,  $28,  $35.50. 

Buy  from  Brown  &  Clark,  for  cash,  a  soda  fountain  for  $565. 

Receive  from  Jefferson  D.  Fore,  on  %,  $45. 
'  Sell  A.  O.  Pilson,  on  %,  10  lbs.  Licorice  Root  at  12^,  $1.20,  25  lbs.  Chloride  Lime  at  9i,  total 
$3.45. 

Receive  from  S.  S.  Davis,  on  %,  check  for  $55.20. 

Sell  to  Miller  &  Davis,  on  %,  40  pkgs.  Cream  of  Tartar  at  40&  $16. 

Pay  for  advertising,  $56. 

Sell  Oliver  P.  Robinson,  on  %,  6  bottles  Acetozone,  at  $1.50,  $9. 

Cash  sales,  $14.20. 

9. 

Buy  from  Hance  Bros.  &  Wight,  on  %,  75  doz.  Chlorate  Potash  Tablets  at  75j£,  $56.25. 

Sell  to  Chas.  H.  Brooke,  on  %,  2  gross  bxs.  Gelatine  Tablets,  $9,  $18. 

Receive  from  Ezekiel  Forman,  on  %,  $84.30. 

Sell  Arnold  &  Co.,  on  %,  2,000  Whooping  Cough  Tablets  at  $3.85  per  M,  $7.70. 

Receive  from  Oliver  P.  Robinson,  on  %,  $36.42. 

Sell  Doan  &  Carter,  on  %,  6  doz.  pints  Cod  Liver  Oil  at  $13,  $78. 

takes  home  a  perfume  atomizer,  $2.50. 

(Student's  name) 

Pay  for  washing  and  oiling  floors,  $23. 

Pay  Hance  Bros.  &  Wight,  on  %,  $75. 

Sell  to  Robt.  Ross,  on  %,  48  boxes  Soda  Mints  at  $1.45,  $69.60. 

Sell  T.  E.  Zimmerman  &  Co.,  on  %,  1  formaldehyde  generator,  $10. 


86        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

Receive  from  A.  O.  Pilson,  on  %,  $34.21. 

Sell  Double  &  Co.,  on  %,  24  doz.  tubes  Euthymol  Tooth  Paste,  at  $2.25,  $54.00. 

Pay  clerks,  U8. 

Cash  sales,  $21.00 

11. 

Buy  from  Muth  Bros.  &  Co.,  for  cash  (check)  20  doz.  pints  Iron,  Quinine  and  Strychnine 
Phosphates  at  $9.75,  $195. 

SeU  L.  N.  Meadows  &  Co.,  on  %,  1  doz.  Magic  Atomizers,  $6. 

Sell  Wm.  Stewart,  on  %,  5  gross  assorted  corks  at  60^,  $3. 

Sell  D.  C.  Aughinbaugh  &  Son,  for  cash,  24  doz.  Sanford's  Mixture,  at  $2,  $48. 

Pay  for  cleaning  windows,  $1.25. 

Sell  Jefferson  D.  Fore,  on  %,  24  doz.  Emulsion  Cod  Liver  Oil  at  $4.25,  $102. 

Receive  from  John  Lang,  on  %,  $30. 

Pay  Muth  Bros.,  on  %,  $156.25. 

Sell  Jefferson  D.  Fore,  on  %,  12  boxes  Alcock's  Porous  Plasters,  at  $2.25,  $27. 

Pay  Sharp  &  Dohme,  on  %,  $86.25. 

Buy  from  Gilbert  Bros.  &  Co.,  on  %,  100  bottles  Aromatic  Rhubarb  Syrup,  at  45^,  $45. 

Cash  sales,  $24.32. 

12. 

Sell  to  National  Drug  Co.,  on  %,  12  lbs.  Senna  Leaves,  at  30c,  20  lbs.  Orris  Root  at  20^,  total 
$7.60. 

A.  E.  Trader  draws  for  his  own  personal  use,  $150. 

Receive  from  Miller  &  Davis,  on  %,  $12.50. 

Sell  Wm.  Stewart,  on  %,  24  doz.  pkgs.  Epsom  Salts  at  35j£,  12  doz.  bottles  Calomel  at  75^, 
total  $17.40. 

Pay  for  coal,  $25. 

Pay  Wyeth  Bros.,  on  %,  $45.69. 

Receive  from  Robt.  Ross,  on  %,  $54.60. 

Sell  Arnold  &  Co.,  on  %,  24  doz.  pkgs.  Copperas  at  35^,  5  cases  Tanglefoot  Fly  Paper  at  $2.80, 
$22.40. 

Receive  from  Double  &  Co.,  on  %,  check  for  $85. 

Pay  Hance  Bros.  &  Wight,  on  %,  $150. 

Receive  from  Hall,  Atkinson  &  Co.,  on  %,  check  for  $110. 

Cash  sales,  $21.60 

At  the  close  of  business,  Feb.  12,  the  inventories  are  as  follows: 

Merchandise,  $10,124  35. 

Store  &  Office  Fixtures,  $1,350.00. 

On  the  morning  of  Feb.  13,  what  is  the  amount  of  cash  on  hand  according  to  your  books? 

What  has  been  the  net  private  loss  or  gain  of  each  member  of  the  firm,  and  how  much  does 
each  have  invested  in  the  business? 

EXERCISE  NO.  15. 

GENERAL    STORE. 

Open,  keep,  and  close  a  set  of  books  for  the  General  Store  of &  Trader,  who 

(Student's  name) 

have  entered  into  business  on  Jan.  14,  19 — ,  with  investments  as  follows: 
invests  cash,  $1,750. 

(Student's  name) 

A.  E.  Trader  invests  cash,  $341.29;  Merchandise,  $1,425.73;  Store  and  Office  Fixtures  $150; 
and  accounts  due  him  as  follows:  John  Lagne,  $25;  Sarah  Dennison,  $6.75;  G.  H.  Terrell,  $10.25; 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.         87 

W.  S.  Barnes,  $9.72;  Mrs.  J.  B.  Reed,  $12.40;  Louis  P.  Doub,  $8.72;  L.  B.  Durant,  $20.15;  Wil- 
liam Wilson,  $10.05;  W.  S.  West,  $12.42;  James  Beall,  $12.72;  Frank  Jones,  $18.68;  Mrs.  James 
Stotlemeyer,  $7.23;  Geo.  F.  Crawford,  $25;  Samuel  Wright,  $75;  Mrs.  Emma  G.  Crawford,  $18.75; 
Jos.  L.  Pureell,  $10.95;  John  D.  Powell,  $40.31;  Geo.  W.  Baker,  $32.05;  David  G.  Hensell,  $7.23; 
Mrs.  John  Harris,  $12.75;  and  the  following  accounts  which  he  owes:  Silberman  &  Todes,  ?125; 
D.  M.  Crabill,  $20.75;  Stickley  Milling  Co.,  $172.25;  Baltimore  Bargain  House,  $225.15. 

Sell  L.  B.  Durant,  on  %,  1  bbl.  apples  at  $2.15. 

Sell  to  John  Lagne,  on  %,  1  suit  boys'  clothes,  $10. 

Sell  to  Mrs.  J.  B.  Reed,  on  %  2  sacks  flour  at  $1.05,  $2.10. 

Sell  to  Mrs.  Jas.  R.  Howell,  on  %,  1  large  lamp,  $2.50. 

Sell  to  Samuel  Wright,  on  %,  25  lbs.  sugar  at  U,  $1.50. 

draws  cash  for  personal  use,  $25. 

(Student's  name) 

Sell  to  Mrs.  Sarah  Dennison,  on  %,  10  yds.  black  dress  goods,  at  75^,  $7.50. 

Sell  to  G.  H.  Terrell,  on  %,  1  overcoat,  $15. 

Sell  to  W.  S.  Barnes  for  cash  1  hat,  $2.00,  3  pairs  gloves  at  75&  total  $4.25. 

Receive  from  George  Crawford,  on  %,  $12.50. 

Buy  from  Daniel  Miller  &  Co.,  on  account,  12  suits  boys'  clothes,  at  $8.60,  $103.20. 

Sell  to  Mrs.  T.  W.  Parsons,  on  %,  1  sewing  machine  at  $28.00. 

Sell  to  Jos.  L.  Pureell,  on  %,  1  pair  shoes,  $3.50. 

Pay  Silberman  &  Todes,  on  %,  $75. 

Pay  for  wrapping  paper,  $10.60. 

Receive  from  John  Lagne,   on   %,   $8.50. 

Sell  to  W.  S.  Barnes,  on  %,  3  suits  of  underwear,  at  $1.25,  total  $3.75. 

Pay  for  advertisement  in  newspapers,  $17.50. 

Cash  sales,  $16.40. 

JANUARY    15. 

Sell  John  D.  Powell,  on  %,  1  sack  fine  salt,  $1.50.  and  4  lbs.  coffee  at  25^,  total  $2.50. 

Sell  to  Geo.  Crawford,  on  %,  1  hand  saw,  $1.50. 

Sell  to  Mrs.  Jas.  Stotlemeyer,  on  %,  2  lbs.  chocolate  candy,  at  60j£,  $1.20. 

Sell  to  Frank  Jones,  on  %,  1  shaving  outfit,  $2.25. 

buys  a  watch  from  a  traveling  salesman  for  his  own  use,  $27, ,  ,and  pays  for 

(Student's  name) 

it  out  of  the  cash  drawer. 

Receive  from  Wm.  Wilson,  on  %,  $5.65. 

Pay  D.  M.  Crabill,  on  %,  $12.00. 

Receive  from  David  G.  Hensell,    on  %,    $3.75. 

Sell  to  Mrs.  John  Harris,  on  %,  3  lbs.  tea  at  35^,  $1.05. 

Sell  to  Louis  P.  Doub,  on  %,  2  sacks  flour  at  $1.10,  $2.20. 

Sell  to  Jas.  Beall,  on  %,  1  overcoat,  $15.00. 

Sell  to  Geo.  W.  Baker,  on  %,  1  felt  hat,  $2.00. 

Receive  from  Mrs.  Jas.  Stotlemeyer,  on  %,  $5.00. 

Pay  for  painting  sign,  $8.00. 

Pay  for  stationery,  for  use  in  office,  $10. 

Buy  from  Stickley  Milling  Co.,  50  sacks  flour  at  85^,  $42.50. 

Send  Baltimore  Bargain  House,  on  %,  check  for  $97.50. 

Buy  a  safe  for  office  from  Remington  &  Sherman  Co.,  for  cash,  $150. 

Cash  sales,  $12.50. 

JANUARY  16. 

Sell  W.  S.  West,  on  %,  1  pr.  overshoes  $1.25,  1  heavy  coat,  $4.50,  $5.75.  ^ 
Receive  from  John  Lagne,  on  %,  $14.50. 


88        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

.Receive  from  Mrs.  Emma  G.  Crawford,  on  %,  $7.50. 
Pay  Daniel  Miller  &  Co.,  on  %,  $56.40. 
Receive  from  Sarah  Dennison,  on  %,  $4.50. 
Receive  from  W.  S.  Barnes,  on  %,  $2.50. 
Receive  from  Mrs.  J.  B.  Reed,  on  %,  $3.40. 
Receive  from  John  D.  Powell,  on  %,  $13.75. 

Sell  Mrs.  Emma  G.  Crawford,  on  %,  12  yds.  dress  goods,  at  $1.00,  $12. 
Send  Stickley  Milling  Co.,  on  %,  check  for  $56.24. 
Pay  for  stamps,  $2.00. 

Sell  David  G.  Hensell,  on  %,  2  suits  boys'  clothes  at  $8.50,  $17. 
Receive  from  Samuel  Wright,   on  %,   $27.00. 
A.  E.  Trader  draws  $45  for  personal  use. 
Receive  from  Jas.  L.  Purcell,  on  %,  $7.50. 
Receive  from  Mrs.  John  Harris,  on  %,  $4.25. 
Receive  from  G.  H.  Terrell,  on  %,  $12.25. 
Sell  Samuel  Wright,  on  %,  1  ham,  7  lbs.,  at  18^,  $1.26. 
Receive  from  Louis  P.  Doub,  on  %,  $4.25. 
Receive  from  L.  B.  Durant,  on  %,  $14.50. 
A.  E.  Trader  has  2  sacks  flour,  at  85^,  $1.70,  sent  to  his  home. 
Pay  clerks,  $24. 
Cash  sales,  $12.60. 

After  the  close  of  business,  Feb.  16th,  the  inventories  are  as  follows: 
Merchandise,  $1,546.37. 
Store  and  Office  Fixtures,  $300.00. 

What  is  the  amount  of  cash  on  hand  according  to  your  books? 

What  has  been  the  net  private  loss  or  gain  of  each  member  of  the  firm,  and  how  much  does 
each  have  invested  in  the  business?  • 

WRITTEN  TEST  NO.  6. 

1.  What  are  accounts?    Debits?     Credits?    Personal  accounts? 

2.  Do  personal  accounts  include  accounts  with  individuals  only? 

3.  What  do  we  find  in  the  Cash  account? 

4.  On  which  side  of  the  Cash  account  are  the  receipts?    The  payments? 

5.  What  does  the  difference  between  the  debit  and  credit  sides  of  the  Cash  account  show? 

6.  Which  side  of  the  Cash  account  is  always  the  larger,  when  there  is  any  difference?     Why? 

7.  What  is  the  Merchandise  account?    Which  side  shows  the  amount  sold?    The  amount 
bought? 

8.  What  are  books  of  original  entry?    Name  two. 

9.  Why  is  it  necessary  to  have  a  full  explanation  of  the  transaction  in  each  Journal  entry? 

10.  Should  the  Cash  Book  contain  a  full  explanation  of  each  cash  transaction? 

11.  What  is  journalizing? 

12.  Why  should  the  Ledger,  including  the  Cash  account  as  found  in  the  Cash  Book,  always 
be  in  balance  in  double  entry  books? 

13.  What  is  a  Trial  Balance?    When  is  a  Trial  Balance  taken? 

14.  Why  should  both  sides  of  the  Trial  Balance  be  the  same? 

15.  From  what  book  or  books  is  the  Trial  Balance  taken? 

16.  What  may  we  learn  from  a  Trial  Balance? 

17.  May  we  close  the  books  from  a  Trial  Balance? 

18.  What  is  the  first  thing  you  do  when  your  Trial  Balance  fails  to  balance?    What  do  you 
do  after  that?         < 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        89 

NOTES. 

70.  A  promissory  note  is  a  written  promise,  signed  by  the  maker,  to  pay  to  the  payee  named 
in  the  instrument  or  to  the  order  of  the  payee  or  to  bearer,  a  definite  sum  of  money  on  demand  or 
at  a  fixed  or  determinable  future  time. 

The  parties  to  a  promissory  note  are,  the  maker,  (the  person  who  signs  the  note),  the  payee, 
(the  person  to  whom  the  money  is  to  be  paid)  and  the  endorser,  if  any,  (the  person  who,  by  en- 
dorsing the  note,  becomes  responsible  for  its  payment  in  the  event  of  the  maker  failing  to  pay  it 
at  maturity). 

71.  The  kinds  of  promissory  notes  in  most  common  use  besides  the  plain  promissory  note 
issued  by  one  person,  or  concern,  are  the  Joint  and  Several  note,  in  which  two  or  more  persons 
become  jointly  and  individually  responsible  for  the  payment  of  the  note;  the  Collateral  note,  which 
contains  a  description  of  stocks,  bonds  or  other  property  deposited  with  the  payee  as  a  guarantee 
that  the  note  will  be  paid  at  maturity,  and  which  authorizes  the  payee  to  sell  the  property  so  de- 
posited and  take  payment  of  the  note  out  of  the  proceeds,  in  the  event  of  the  maker  failing  to  pay 
the  note  at  maturity;  and  the  Judgment  note  in  which  the  maker  of  the  note  waives  the  benefit  of 
all  Homestead  and  Exemption  Laws  and  authorizes  any  attorney  to  appear  for  him  in  any  court 
of  competent  jurisdiction,  and  confess  judgment  in  favor  of  the  payee,  not  only  for  the  face  of 
the  note,  but  also  for  attorney's  fee  and  costs  of  suit,  in  the  event  of  the  maker  failing  to  pay  same 
at  maturity. 

Sometimes  a  form  of  note  is  used  in  which  the  Maker  and  Endorsers  waive  demand,  notice 
and  protest,  and  authorize  the  addition  of  a  fee  for  collection  costs  to  the  face  of  the  note  in  the 
event  of  the  note  not  being  paid  at  maturity.  The  simple  form  of  Promissory  note  is  the  note 
most  used  in  general  business  transactions  where  the  persons  doing  business  together  have  con- 
fidence in  each  other.  The  Collateral  note  is  used  extensively  in  borrowing  money  from  banks  or 
trust  companies.  Judgment  notes  and  notes  waiving  demand,  notice  and  protest  are  used  only 
where  there  is  a  lack  of  confidence  or  where  the  maker  of  the  note  is  at  the  mercy  of  the  payee  and 
must  submit  to  whatever  terms  his  creditor  dictates. 

The  kinds  of  notes  above  described  will  be  found  illustrated  on  pages  90  and  91. 

72.  Notes  do  not  bear  interest  before  maturity  unless  it  is  so  stated  on  the  face  of  the  note. 
A  note  reading  "With  interest,"  will  bear  interest  at  the  legal  rate  for  the  state  in  which  the  note 
is  issued,  unless  some  other  rate  of  interest  is  stated,  as,  "With  interest  at  four  per  cent." 

73.  In  Pennsylvania  and  most  other  states,  notes  falling  due  on  Saturday,  which  is  a  half 
holiday,  or  on  Sunday,  or  any  other  legal  holiday,  are  payable  on  the  next  succeeding  business 
day,  and  banks  in  discounting  notes,  in  counting  the  time,  include  the  last  day  allowed  the  maker 
on  which  to  make  payment. 

74.  In  Pennsylvania  and  some  other  states,  banks  in  discounting  notes  charge  interest  for 
both  the  Day  of  Discount  and  the  Day  of  Maturity,  thus  charging  interest  for  one  day  more  than 
the  difference  in  time  between  those  dates.  Students  will  follow  this  plan  in  all  of  the  work  con- 
tained in  this  text  book  unless  advised  to  the  contrary  by  the  instructor. 

75.  If  a  note  is  not  paid  on  the  day  it  becomes  due,  it  should  be  protested  by  a  Notary  Pub- 
lic the  same  day  and  notice  of  protest  for  non-payment  should  be  given,  or  mailed,  the  same  day 
to  the  maker  of  the  note  and  to  every  endorser  of  the  paper.  The  mailing  of  the  notices  is  usually 
done  by  the  notary,  who,  in  addition  to  his  fee  for  protesting  the  paper,  is  permitted  by  law  to  make 
an  extra  charge  for  each  notice  sent  and  for  postage.  If  a  note  that  is  not  paid  on  the  day  it  is 
elue,  is  not  protested,  or  if  notice  of  the  protest  for  non-payment  is  not  given  or  sent  promptly  to 
the  endorsers  of  the  note,  the  endorsers,  under  certain  circumstances,  are  released  from  their 
liability  for  the  payment  of  the  note. 


90        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 


Note. 


\**J' 


£ 


VOL 


/^^~ 


/mewt^s^  ~~~r,    sty- /£^*^t^6 


mam  MMg Hoskins. Stationers. 


Joint  and  Several  Note. 


•  ^ 


v  ^^ 


*  ££*    /^y- 


■too 


Aqt*caa>  Hfo-Wlt.  Hoskins  ,  Stationers 


^MuOm%dm\ 


~Ay 


Demand  Note. 


^2^ 


«/» 


'(&£ 


<*fr 


4?- 


:  ^/-e^M  ^C^e^*^  y^  /■//; 


—  ^/JU£'- 


MfoMTi- Hoshjn.3  ,  Stu* tenets 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        91 


Collateral  Note. 


Philadelphia, ^*~*^    >*j 19  — 

after  date,  for  Value  Received^;-*-"*— promise  to  pay  to  the  order  of 


7^\  DOLLARS, 
with  intereit,  having  deposited  as  collateral  security  for  payment  of  this  or  any  other  Jiability  or  liabilities  tp-^aid  holder  hereof,  due  or  to  become  due, 

orjhatmay  be  hereafter  contracted,  the^following  property,  viti  jm.r..^?... 

JUL 


with  the  right  on  the  part  of  the  holder  hereof,  to  repledge  the  securities  above  mentioned,  or  to  substitute  or  exchange  for  the  same  other  certificates  of  Ilka 
tenor  and  amount,  and  also  from  time  to  time  to  demand  additional  collateral  security,  and  upon  failure  to  comply  with  any  such  demand,  this  obligation 
shall  forthwith  become  due,  with  full  power  and  authority,  to  the  holder  hereof,  or  assigns,  in  case  of  such  default,  or  of  the  non-payment  of  any  of  the 
liabilities  above  mentioned  at  maturity,  to  sell,  assign,  and  deliver  the  whole,  or  any  part  of  such  securities,  or  any  substitutes  therefor  or  additions  thereto 
at  any  broker's  board,  or  at  public  or  private  sale,  at  their  option,  at  any  time  or  times  thereafter,  without  advertisement  or  notice  to  the  undersigned,  and 
with  the  right  on  the  part  of  the  holder  hereof,  to  become  purchaser  thereof  at  such  sale  or  sales,  freed  and  discharged  of  any  equity  of  redemption.  And 
after  deducting  all  legal  and  other  costs  and  expenses  for  collection,  sale  and  delivery,  to  apply  the  residue  of  the  proceeds  of  such  sale  or  sales  so  made,  to 
pay  any.  either  or  all  of  said  liabilities,  as  said  holder  hereof  shall  deem  proper,  returning  the  overplus  to  the  undersigned :  and  the  undersigned  will  still 
remain  liable  for  any  amount  so  unpaid.  It  being  further  understood  and  agreed  that  the  Feus  National  Bane  of  Philadelphia  shall  have  a  like 
lien  upon  any  and  all  funds,  stocks,  bonds,  notes,  and  other  property  at  any  time  in  the  hands  of  said  Bank  belonging  to  the  maker,  or  endorser  or 
endorsers,  guarantor  or  guarantors  hereof,  as  security  for  this  note  and  for  any  and  all  liability  of  liabilities,  matured  or  unmatured,  ot  such  maker,  endor- 
ser or  endorsers,  guarantor  or  guarantors  to  said  Bank,  which  lien  shall  be  enforceable  in  like  manner  and  shall  be  subject  to  all  the  provisions  herein 
above  and  before  mentioned  and  set  quL  In  the  event  of  an  application  for  the  appointment  of  a  Receiver  for  the  undersigned  or  any  party  hereto,  or  the 
making  of  a  general  assignment  by,  or  the  filing  of  a  petition  in  bankruptcy  by  or  against,  the  undersigned,  or  any  guarantor  or  endorser  of  this  note,  or 
any  party  hereto,  or  of  any  other  act  of  insolvency  of  any  of  said  parties,  however,  expressed  or  indicated,  all  aforesaid  liabilities  shall,  without  notice, 
at  the  option  of  the  said  holder,  become  immediately  due,  without  demand  for  payment  thereof. 

It  is  further  agreed  that  upon  any  transfer  of  this  note,  the  said  holder  may  deliver  the  said  collateral  or  any  part  thereof  to  the  transferee,  who  shall 
thereupon  become  vested  with  all  the  powers  and  rights  herein  above  given  to  the  said  holder  in  respect  of  said  note  and  collateral,  and  the  said  holder  shall 
be  thereafter  forever  relieved  and  fully  discharged  from  any  liability  or  responsibility  in  connection  therewith. 


PAYABLE    AT   THE 
PENN    NATIONAL    BANK. 


Chn.lRnmml. 


Judgment  Note. 


[No.  161.]     Printed  and  sold  by  Wm.  F  Murphy's  Sons  Co  ,  509  Chestnut  St. ,  Philadelphia. 


pav^to  the  order  of..^ C^x..:. yL/2..:. 


&,<?& 


"*«~^  1 00 

without  defalcation,  value  received,  with  interest.       And  further,V-*»? do  hereby  authorize  and  empower  any  Attorney  of  any  Court 

of  Record  of  Pennsylvania,  or  elsewhere,  to  appear  for  and  to   enter  Judgment  against    ^flrav«V!~... for  the  above  sum,  with  or  without 

declaration,  with  costs  of  suit,  release  of  errors,  without  stay  of  execution,  and  with .^!sfZ...y/fi...peT  cent,  added  for  collecting  fees ;    and 

.also  waive  the  right  of  inquisition  on  any  real  estate  that  may  be  levied  upon  to  collect  this  note,  and  do  hereby  voluntarily 

aive  and^rele: 
or  exemption  laws  of  any  State,  now  in  force,  or  hereafter  to  be  passed. 
WITNESS. 


.\i/.. also  waive  the  right  of  inquisition  on  any  real  estate  that  may  be  levied  upon  to  collect  this  note,  and  do  hereby  vpli 

condemn  the  same,  and  authorize  the  Prothonotary  to  enterjipon  the  ft   FA.^r?»^*£....said  voluntary  condemnation,  and...^^- further 

agree  that  said  estate  may  be  sold  on  a  ft  FA  ,  and_..\j£ .hereby  waive  and^elease  all  relief  from  any  and  all  appraisement,  stay, 


92        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

DRAFTS. 

76.  A  Draft  is  a  written  request  for  the  person  to  whom  the  draft  is  directed  to  pay  to  the 
order  of  the  person  who  issues  the  draft  or  to  the  order  of  some  other  person  named  in  the  draft, 
a  definite  sum  of  money,  a  certain  number  of  days  after  sight,  a  certain  number  of  days  after  de- 
mand, or  a  certain  number  of  days  after  date.     For  information  about  Sight  Drafts,  see  article 

15. 

A  draft  that  is  payable  a  certain  number  of  days  after  sight  or  a  certain  number  of  days  after 
demand,  should  be  presented  promptly  to  the  person  who  is  directed  or  requested  to  make  payment. 
One  of  the  reasons  for  this  is,  that  the  time  at  which  the  payment  is  to  be  made  is  found  by  count- 
ing the  designated  number  of  days  from  the  date  on  which  the  draft  is  presented  to  the  Drawee 
for  his  acceptance.  Another  reason  why  any  draft  should  be  presented  promptly  for  acceptance 
is  that  it  is  important  to  know  whether  or  not  the  person  on  whom  the  draft  is  drawn  will  agree  to 
pay  it  at  maturity, — when  it  becomes  due.  A  draft  that  is  accepted  is  called  an  Acceptance  and 
becomes  in  effect  the  same  as  a  promissory  note  issued  by  the  acceptor  of  the  draft.  A  draft  is 
accepted,  by  the  person  on  whom  it  is  drawn  writing  across  the  face  of  the  draft,  "Accepted"  and 
signing  his  name.  If  the  draft  is  payable  a  certain  number  of  days  after  sight  or  after  demand, 
the  person  accepting  it  should  write  the  date  of  the  acceptance  after  the  word  "Accepted"  before 
signing  his  name,  so  that  the  date  after  which  the  draft  will  become  due  when  the  specified  number 
of  days  have  passed,  will  be  indisputably  fixed.  The  endorsement  on  the  face  of  a  draft,  accept- 
ing it,  is  usually  written  in  red  ink. 

The  parties  to  a  draft  are,  the  Drawer,  the  person  who  draws  or  issues  the  draft,  the 
Drawee,  the  person  on  whom  the  draft  is  drawn, — the  person  requested  to  make  the  payment, 
and  the  Payee,  the  person  to  whom  or  to  whose  order  the  money  is  to  be  paid.  The  drawee 
.after  he  accepts  the  draft,  becomes  the  Acceptor,  and  the  draft,  when  accepted,  becomes  an 
Acceptance. 

Drafts  are  protested  for  non-acceptance,  if  they  are  not  accepted  when  presented  for  ac- 
ceptance, unless  the  Drawer  has  directed  that  there  shall  be  no  protest,  and  drafts  should  be  pro- 
tested for  non-payment  if  not  paid  when  due.     A  Draft  and  an  Acceptance  are  shown  on  page  93. 

BILLS  RECEIVABLE.     BILLS  PAYABLE. 

77.  The  "Bills  Receivable,"  "Bills  Payable"  and  "Interest"  accounts,  of  which  no  mention 
has  thus  far  been  made,  are  accounts  which  are  found  in  nearly  every  set  of  books.  In  this  con- 
nection, the  first  thing  for  the  student  to  do  is  to  learn  what  "Bills  Receivable"  are  and  what 
"Bills  Payable"  are,  and  to  learn  that  all  transactions  of  which  "Bills  Receivable"  form  a  part, 
must  be  entered  in  the  Bills  Receivable  account,  and  that  all  transactions  of  which  "Bills  Pay- 
able" form  a  part,  must  be  entered  in  the  Bills  Payable  account. 

Bills  Receivable  are  notes,  and  time  drafts  or  acceptances  in  our  favor,  for  which  we  are  to 
receive  the  money. 

Bills  Payable  are  notes  which  we  have  given  to  other  persons  and  time  drafts  of  other  persons 
on  us  which  we  have  accepted,  for  both  of  which  we  will  have  to  pay  the  money. 

Remember  that  any  note  or  acceptance  for  which  we  are  to  receive  the  money  always  belongs 
in  the  Bills  Receivable  account,  whether  we  are  receiving  the  note  or  whether  we  are  receiving 
money  in  payment  of  the  note, — whether  it  is  our  draft  which  has  been  accepted  or  whether  we 
are  receiving  payment  of  our  draft  which  has  previously  been  accepted.  Remember,  also,  that 
any  note  or  acceptance  that  we  are  to  pay  always  belongs  in  the  Bills  Payable  account  whether  we 
are  issuing  the  note  or  accepting  the  draft  or  whether  we  are  paying  the  note  or  the  acceptance. 


MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        93 


Draft. 


IU* 


rJ^UU^€^^^_^^t 


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®faMtffaWMcfam#w 


(% \^a£*^*-^L^s> 


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<y\$ 


&£/~,,&. 


CENTURY BOND.         Xo.300         Hoskins  .Stationers 


Acceptance. 


y^^t^r^yl 


j^^lS  y_3£<^x^t^L^£yL 


CBNTimy  B<pm 


No.  3UO         Hasltlns  ,  Stationers 


Trade  Acceptance. 


z 

< 

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Z 

H 

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u"s 

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2  g 


fc  £ 


B  S»S 
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(bAIB) 


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(DATE   OF   MATUR1T  '\ 


Q 

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ACCEPT  THIS  BILL  PAYABLE  AT  ANY   Bi.NIC  BANKER  OR 
U 

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TO 


(MAMS  OF    DRAWEE) 


.191 


THE  OBLIGATION  OF  THE  ACCEPTO£-«EREOF  ARISES  OWf  OF  IT-  E  PURCl-j^SE  OF  GOODS  FROM  THE  DRAWER.     THE  DRAWEE  MAY 


IjjkuST  COMPANY 


(STREET   ADDRESS) 


.PA\ 


*IN  THI 

o 

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o 

5 


No.. 


TO  THE  ORDER  OF  OURSELVES 


.(DOLLARS  $_ 


J 


UNITED   STATES   WHICH    HE   MAY    DESIGNATE. 


(SIGNATURE  0»   DRAWER) 


BY. 


(CITY  OF  DRAWER) 


The  Trade  Acceptance  is  confined  to  credit  obligations  arising  from  the  sale  of  goods, 
note  or  a  draft  may  cover  any  kind  of  obligation. 


94        MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

If  we  are  to  receive  the  money,  it  is  Bills  Receivable,  and  if  we  are  to  pay  the  money,  it  is 
Bills  Payable. 

78.  With  a  two-party  draft,  the  Drawer  is  the  Payee.  Such  a  draft,  when  it  has  been  ac- 
cepted, to  the  Drawer-payee  will  always  be  Bills  Receivable  because  he  is  to  receive  the  money 
for  it;  to  the  Drawee,  when  he  has  accepted  it,  it  will  be  Bills  Payable  because  he  is  to  pay  the 
money  for  it. 

In  the  case  of  a  three  party  time  draft,  the  Payee  is  a  third  person,  usually  a  creditor  of  the 
Drawer,  and  when  such  a  draft  is  drawn,  the  Drawer  makes  an  entry  in  his  Journal  debiting  the 
Payee  and  crediting  the  Drawee.  The  Drawee  makes  an  entry  in  his  Journal,  debiting  the  Drawer 
and  crediting  Bills  Payable,  and  the  Payee  makes  an  entry  in  his  Journal,  debiting  Bills  Receiv- 
able and  crediting  the  Drawer. 

When  this  acceptance  is  paid,  the  Drawee  credits  Cash  and  debits  Bills  Payable  and  the  Payee 
debits  Cash  and  credits  Bills  Receivable. 

79.  At  this  point,  before  the  student  proceeds  with  this  lesson,  the  teacher  will  drill  the 
student  so  much  and  so  thoroughly  on  notes  and  acceptances  payable  to  us  and  by  us,  that  he 
will  always  know  what  such  papers  are  when  he  sees  them,  and  will  always  know  which  are  Bills 
Receivable  and  which  are  Bills  Payable,  and  which  must  be  entered  in  the  Bills  Receivable  ac- 
count, and  which  in  the  Bills  Payable  account.     In  the  illustrations,  let  the  name 

(Student's  namel 

&  Trader  be  used  as  the  name  of  the  firm  with  which  the  student  is  connected.  Material  for  il- 
lustrations may  be  obtained  by  turning  to  Exercise  Nos.  5,  6,  and  7.  Instead  of  every  remittance 
and  payment  received  in  those  exercises,  allow  a  note  to  be  received  or  a  draft  to  be  accepted  or 
the  payment  to  be  in  settlement  of  a  note,  and  instead  of  every  remittance  sent  or  payment  made, 
allow  a  note  to  be  sent  or  a  time  draft  to  be  accepted,  or  allow  the  remittance  to  be  in  payment  of 
a  note  or  an  acceptance. 

THE  BILLS  RECEIVABLE  ACCOUNT. 

80.  Any  note  or  acceptance  for  which  we  are  to  receive  the  money,  always  belongs  in  the 
Bills  Receivable  account,  whether  we  are  receiving  the  note,  or  our  draft  is  accepted,  or  we  are 
receiving  money  in  payment  of  the  note  or  acceptance. 

81.  The  Bills  Receivable  account  is  kept  to  show  what  notes  and  accepted  time  drafts  of 
other  persons  we  hold  and  when  we  are  to  receive  the  money  for  them. 

82.  If  at  the  time  a  set  of  books  is  opened,  there  are  Bills  Receivable  on  hand,  they  will 
appear  in  the  Journal  entry  among  the  resources  invested  in  the  business  by  the  person  to  whom 
they  belong,  and  should  be  posted  to  the  debit  side  of  the  Bills  Receivable  account.  All  such 
debits  to  the  Bills  Receivable  account  at  the  opening  of  the  books  are  balanced  by  being  included 
in  the  credit  of  the  Net  Investment  to  the  proprietor's  Stock  account. 

83.  If  at  any  time  after  the  books  are  opened,  we  receive  a  note  or  an  acceptance  in  part 
or  full  settlement  of  an  account,  we  debit  the  Bills  Receivable  account  for  the  amount  of  the  note 
or  acceptance.  The  debit  to  the  Bills  Receivable  account  in  that  case  is  balanced  by  crediting  the 
account  of  the  person  who  gives  us  the  note  or  accepts  our  draft. 

84.  The  Bills  Receivable  account  should  be  credited  whenever  we  receive  the  money  for 
any  note  or  acceptance  we  hold,  whether  we  receive  the  money  from  the  person  who  gave  us  the 
note,  or  accepted  our  draft,  or  receive  it  by  getting  the  note  or  acceptance  discounted,  or  by  turn- 
ing it  over  to  some  other  person  whom  we  owe,  in  payment  or  part  payment  of  our  indebtedness  to 
him.  If  we  receive  cash  for  the  note,  the  credit  to  the  Bills  Receivable  account  will  of  course  be 
balanced  by  a  debit  to  the  Cash  account.  If  the  note  is  turned  over  to  some  other  person,  the 
credit  to  Bills  Receivable  account  will  be  balanced  by  a  debit  to  the  account  of  the  person  to  whom 
the  note  is  turned  over. 


MODERN  BOOKKEEPING,-  ACCOUNTING  AND  BUSINESS  PRACTICE.        95 

85.  If  we  have  a  note  discounted,  we  debit  the  Cash  account  and  credit  the  Bills  Receivable 
account  for  the  entire  amount  of  the  note,  just  as  if  we  had  received  the  whole  amount,  although 
in  fact  we  receive  only  the  face  of  the  note  less  the  discount  on  it  to  maturity.  We  then  credit 
the  Cash  account  and  debit  the  Interest  account  for  the  amount  of  the  discount,  just  as  if  we  had 
paid  the  bank  the  amount  of  the  discount  charge,  which  we  have  really  done  in  getting  the  note 
discounted.  When  we  have  a  note  which  does  not  bear  interest  discounted,  the  bank  charges  us 
simple  interest  on  the  face  of  the  note  for  the  time  it  has  yet  to  run,  including  both  the  day  of  dis- 
count and  the  due  date.  If  the  due  date  happens  on  Saturday,  Sunday  or  a  legal  holiday,  the 
note  is  due  on  the  next  succeeding  business  day  and  the  interest  or  discount  must  be  figured  ac- 
cordingly. If  a  note  bears  interest  at  a  rate  which  is  satisfactory  to  the  bank,  the  bank  will  pay 
us  the  face  of  the  note  plus  the  accrued  interest  to  the  date  on  which  we  turn  the  note  over  to  it. 
If  the  bank  pays  us  accrued  interest,  the  Interest  account  is  credited  for  the  interest  and  the  Cash 
account  is  debited.  Some  banks  in  discounting  another  person's  interest  bearing  note  for  a  de- 
positor, will  find  the  amount  of  the  note  at  maturity  and  will  deduct  from  this  the  discount  for  the 
time  that  the  note  still  has  to  run  and  credit  the  depositor  with  the  difference.  The  interest  in 
this  case  is  figured  upon  the  amount  due  at  maturity.  Other  banks  will  simply  deduct  the  dis- 
count for  the  time  that  the  note  still  has  to  run  from  the  face  of  the  note  and  credit  the  depositor 
with  the  difference,  and  then  credit  the  depositor  with  the  entire  amount  of  interest  paid  by  the 
maker  of  the  note  at  the  time  that  the  note  is  paid.  The  bookkeeper  understanding  the  method 
pursued  by  the  bank  with  which  his  firm  deals,  will  do  his  bookkeeping  in  accordance  with  the 
facts. 

86.  If  the  person  who  owes  us  a  note  does  not  pay  it  when  it  becomes  due,  but  gives  us  a 
new  note  for  the  old  one,  we  may  make  the  entry  in  either  of  the  following  ways:  either  write  on 
the  Bills  Receivable  account  or  in  the  Bill  Book,  where  the  entry  for  the  old  note  was  made,  "re- 
newed," and  the  date  and  time  of  the  new  note,  or  credit  the  Bills  Receivable  account  for  the  old 
note,  because  it  was  paid  by  the  new  note,  and  debit  the  Bills  Receivable  account  for  the  new  note, 
because  a  note  is  received.  If  the  second  method  is  used,  the  Journal  entry  will  be — "Bills  Re- 
ceivable to  Bills  Receivable"  for  the  amount  of  the  note.  When  notes  are  renewed,  it  is  custom- 
ary for  the  person  owing  the  note  to  pay  the  interest  on  the  old  note  in  cash.  Then  the  person 
paying  the  interest  credits  his  Cash  account  and  debits  his  Interest  account  for  the  amount  paid, 
while  the  person  to  whom  the  interest  is  paid,  debits  his  Cash  account  and  credits  his  Interest 
account  for  the  amount  received. 

87.  Persons  sometimes  make  a  part  payment  on  a  note  which  they  owe.  If  we  receive  a 
part  payment,  we  debit  Cash  and  credit  the  Bills  Receivable  account  for  the  amount  received, 
entering  in  the  explanation  column  of  both  books,  the  name  of  the  person  who  owed  the  note  and 
the  date  of  the  note  upon  which  the  payment  is  to  be  applied.  It  is  possible  that  we  may  receive 
a  note  which  is  given  to  settle  an  old  note  and  also  a  personal  account.  In  this  case,  the  Bills 
Receivable  account  must  be  debited  for  the  amount  of  the  note  received,  and  two  credit  entries 
must  be  made  to  balance  this  debit;  one  to  the  Bills  Receivable  account,  because  the  old  note  is 
settled,  and  one  to  the  Personal  account  affected,  because  the  note  pays  that  account.  For  an 
illustration  of  the  proper  Journal  entry  to  cover  a  case  such  as  has  just  been  cited,  see  page  103,  the 
second  entry  under  date  of  January  fifth. 

THE  BILLS  PAYABLE  ACCOUNT. 

88.  Any  note  or  acceptance  that  we  are  to  pay  always  belongs  in  the  Bills  Payable  account 
whether  we  are  issuing  the  note  or  accepting  the  draft  or  paying  the  note  or  acceptance. 

89.  The  Bills  Payable  account  is  kept  to  show  what  notes  we  have  given  other  persons  and 
what  time  drafts  of  other  persons  we  have  accepted,  and  when  we  are  to  pay  them. 

90.  If  at  the  time  a  set  of  books  is  opened,  there  are  Bills  Payable  outstanding,  they  will 
appear  in  the  opening  Journal  entry  amoung  the  liabilities  of  the  person  by  whom  they  are  owed, 


96        MODERN   BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

and  should  be  posted  to  the  credit  side  of  the  Bills  Payable  account.  All  such  credits  to  the  Bills 
Payable  account  at  the  opening  of  the  books  are  balanced  by  what  are  equivalent  to  debits  to  the 
Stock  account  of  the  person  who  owed  them,  for  like  amounts.  These  debits  to  his  Stock  ac- 
count, instead  of  being  entered  as  such,  are  merely  subtracted  from  the  credit  to  his  Stock  ac- 
count, in  making  the  entry  for  his  Net  Investment.  All  credits  for  liabilities  invested  in  the 
business  are  balanced  in  just  the  same  way,  in  opening  entries. 

91.  After  the  books  are  opened,  at  any  time  when  we  give  a  note  or  accept  any  person's 
time  draft  on  us,  the  Bills  Payable  account  should  be  credited  for  the  amount  of  the  note  we  give 
or  the  time  draft  we  accept.  The  credit  to  the  Bills  Payable  account  in  this  case,  is  balanced  by 
debiting  the  account  of  the  person  to  whom  we  give  the  note  or  whose  time  draft  we  accept. 

92.  The  Bills  Payable  account  should  be  debited  whenever  we  pay  any  of  our  outstanding 
notes  or  acceptances  and  the  debit. to  the  Bills  Payable  account  in  this  case  is  balanced  by  a  credit 
to  the  Cash  account  for  the  cash  paid  out  in  taking  up  the  note  or  acceptance. 

93.  Whenever  we  give  a  note  or  accept  another  person's  time  draft  on  us,  and  whenever 
another  person  gives  us  a  note  or  accepts  our  time  draft  on  him,  the  first  entry  for  the  transaction 
is  made  in  the  Journal,  because  the  transaction  is  one  in  which  cash  is  neither  paid  nor  received. 
All  transactions  in  which  cash  is  neither  paid  nor  received,  are  entered  first  in  the  Journal.  For 
the  form  of  the  Journal  entry,  see  illustration  on  page  103. 

94.  Whenever  we  pay  a  note  or  time  draft  which  another  person  holds  against  us,  and  when- 
ever another  person  pays  a  note  or  time  draft  which  we  hold  against  him,  the  first  entry  is  made  in 
the  Cash  Book,  because  the  transaction  then  is  one  in  which  cash  is  paid  out  or  received. 

95.  If  we  renew  a  note  that  we  owe,  we  debit  the  Bills  Payable  account  for  the  old  note,  be- 
cause the  old  note  is  paid,  and  credit  the  Bills  Payable  account  for  the  new  note,  because  a  new 
note  is  given,  or  we  may  write  the  word  "renewed"  on  the  account,  and  the  date  and  time  of  the 
new  note. 

96.  Be  careful  in  making  entries  for  notes  and  drafts  to  write  in  the  explanation  column  of 
the  Ledger  the  name  of  the  person  from  whom  the  note  is  received  or  to  whom  the  note  is  given 
and  the  date,  time  and  rate  of  interest,  unless  a  Bill  Book  is  kept,  containing  a  full  description  of 
all  notes  and  drafts  receivable  and  of  all  notes  and  drafts  payable,  in  which  case  the  number  of 
the  note  or  draft  will  be  sufficient  explanation,  since  it  will  enable  us  to  refer  to  our  Bill  Book  and 
get  a  complete  description  of  the  paper  at  any  time. 

97.  One  of  the  most  common  forms  of  ruling  for  bill  books  is  illustrated  on  pages  98  to  101. 
Usually  half  of  a  Bill  Book  is  devoted  to  Bills  Receivable  and  the  other  half  to  Bills  Payable. 
Nearly  all  business  people  receiving  or  issuing  notes  and  drafts  in  any  considerable  number,  keep 
a  Bill  Book. 

INTEREST  AND  DISCOUNT  ACCOUNT. 

98.  The  Interest  and  Discount  account  is  kept  to  show  how  much  we  pay  and  how  much 
we  receive  as  interest  for  the  use  of  money. 

Whenever  we  pay  interest  for  the  use  of  money,  the  Interest  account  is  debited  for  the  amount 
paid,  and  of  course  the  Cash  account  is  credited  for  the  same  amount.  Whenever  we  receive  a 
payment  of  interest  for  the  use  of  money,  the  Interest  account  is  credited  and  the  amount  of  this 
credit  is  balanced  by  a  debit  to  the  Cash  account  for  the  same  amount.  The  money  we  pay  for 
interest  is  usually  the  amount  of  interest  we  pay  on  some  interest-bearing  note  that  we  have  is- 
sued, or  the  discount  on  some  note  of  our  own  that  we  have  had  discounted  at  the  bank  in  bor- 
rowing money,  or  the  discount  on  some  other  person's  note  or  acceptance  that  we  have  received 
and  have  had  discounted  so  as  to  get  the  money  at  once  instead  of  waiting  until  the  maturity 
of  the  note  or  acceptance.     For  illustration  of  an  Interest  and  Discount  account,  see  page  106. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.        97 

WRITTEN  TEST  NO.  7. 

1.  What  are  Bills  Receivable?  Describe  them  so  fully  that  a  person  who  had  previously 
known  nothing  about  them  would  always  recognize  any  paper  of  that  class  on  seeing  it. 

2.  What  are  Bills  Payable?     Describe  them  as  above. 

3.  What  papers  are  always  entered  in  the  Bills  Receivable  account?  What  papers  are  al- 
ways entered  in  the  Bills  Payable  account? 

4.  In  what  cases  in  which  the  Bills  Receivable  or  Bills  Payable  account  is  affected,  are  the 
first  entries  made  in  the  Cash  Book? 

5.  If  the  first  entry  in  a  Bills  Receivable  or  Bills  Payable  transaction  is  made  in  the  Cash 
Book,  how  do  you  know  on  which  side  of  the  Cash  Book  to  make  it? 

6.  If  the  first  entry  in  a  Bills  Receivable  or  Bills  Payable  transaction  is  made  in  the  Cash 
Book,  how  could  you  tell,  if  you  did  not  know  in  any  other  way,  to  which  side  of  the  Ledger  that 
entry  must  be  posted? 

7.  What  is  the  Bills  Receivable  account  kept  for? 

8.  If  at  the  time  the  books  are  opened,  there  are  notes  or  acceptances  on  hand,  payable  to 
the  firm  for  which  the  books  are  being  opened,  what  entries  should  be  made  for  them? 

9.  After  the  books  have  been  opened,  when  should  the  Bills  Receivable  account  be  debited, 
and  when  should  it  be  credited? 

10.  In  recording  transactions  which  affect  the  Bills  Receivable  account,  in  what  cases  should 
the  first  entry  be  made  in  the  Cash  Book,  and  in  what  cases  in  the  Journal? 

11.  If  we  sell  a  note  that  we  hold,  or  have  it  discounted,  what  entries  should  be  made  on  our 
books?     If  we  give  it  to  one  of  our  creditors  to  apply  on  account,  what  entries? 

12.  What  is  the  Bills  Payable  account  kept  for? 

13.  If  at  the  time  the  books  are  opened,  there  are  notes  or  acceptances  outstanding,  which 
the  firm  is  to  pay,  what  entries  should  be  made  for  them? 

14.  After  the  books  have  been  opened,  when  should  the  Bills  Payable  account  be  credited, 
and  when  should  it  be  debited? 

15.  In  recording  transactions  which  affect  the  Bills  Payable  account,  in  what  cases  should 
the  first  entry  be  made  in  the  Cash  Book,  and  in  what  cases  should  the  first  entry  be  made  in  the 
Journal? 

16.  What  is  the  Interest  account  kept  for,  and  when  should  it  be  debited  and  when  credited? 

BILLS  RECEIVABLE  AND  BILLS  PAYABLE  EXERCISES. 

99.  The  Cash  Book,  Journal,  Bills  Receivable,  Bills  Payable,  and  Interest  account  entries 
for  Exercise  No.  16  will  be  found  illustrated  on  pages  103  to  106. 

Look  at  each  transaction  in  Exercise  No.  16  and  decide  in  your  own  mind,  whether  it  should 
be  entered  in  the  Cash  Book  or  in  the  Journal,  and  how  the  entry  should  read,  and  after  deciding, 
turn  to  pages  103  to  105  and  see  whether  or  not  it  is  entered  in  the  book  in  which  you  thought 
it  should  appear  and  in  the  way  you  thought  it  should  be  entered. 

After  having  decided  about,  and  verified,  the  entry  of  all  of  the  transactions  in  the  Cash  Book 
or  Journal,  you  may  take  the  Cash  Book  and  look  at  each  entry,  and  decide  whether  it  should  be 
posted  to  the  Bills  Receivable  or  to  the  Bills  Payable  account,  and  to  which  side  of  the  account  it 
belongs,  and  after  deciding  you  may  look  and  see  whether  or  not  it  is  posted  to  the  account,  and  to 
the  side  of  the  account,  to  which  you  thought  it  should  be  posted. 

After  having  decided  and  verified  all  of  the  postings  from  the  Cash  Book,  you  may  turn  to 
the  Journal  and  look  at  each  entry,  and  decide  whether  it  should  be  posted  to  the  Bills  Receiv- 
able or  to  the  Bills  Payable  account,  and  in  each  case  to  which  side  of  the  account,  and  after  de- 
ciding you  may  look  and  see  whether  or  not  it  is  posted  to  the  account,  and  to  the  side  of  the  ac- 
count to  which  you  thought  it  should  be  posted. 


98 


BILL 


BILLS 


No. 

When  Rec'd 

Drawer  and  Endorser 

Drawee  op  Maker 

In  Whose  Favor 

For  What  Rec'd 

Where  Payable 

/ 

2. 

,f- 

cT 

"to 

^X2^&L^a^ 

^2^&Lt^^> ., 

7 

'A 

't~ 

n 

<r 

'/* 

*&^U^2^. 

.. 

f 

'/<* 

C/^A^i^ti^^- 

.. 

't 

'A 

.7 

• 

1 

i 

- 

BOOK. 


99 


RECEIVABLE 


Date 


Time 


Year      Month       Day  Year 


&        U>^ 


When  Due 


Jan 


& 


&      Jo 
6      Je 


Fen 


7     t* 

7     3-m*-. 


Mr 


Apr  MajJun  Jul  Aug  Sep  Oct  Nov  Dec 


/ 


Amount 


Int. 

Rate   When  and  How  Disposed  of 


/£J  — 
/23  — 
J-J6  — 
JSt  — 

cT/  — 

//^  6 J 

6rj  —  I 

//f  zs- 

63  — 

70  — 


^t^tt^e-e^e^C^tf  S&tr'  j 


<& 


J%Z^s**>&>f^^/£<>^', 


100 


BILL 


BILLS 


No. 


When  Giv  i     Drawer  and  Endorsi  Drawee  or  Maker 


In  Whose  Favor 


For  What  Giver 


Where  Payable 


so  / 


■ 


/ 


J- 


i 


4  y 


-    /' 

f  A 


'9 


.^M^~^^ 


%ZUt~j*^Li~A&j<%2L' 


BOOK. 


101 


PAYABLE 


Yiar 


Date 

Month 


Day 


_  Ime 


fear  J  n  Feb  Mr  Apr  !  la  Ji  n  J  il  A  ig  S  p  0  :t  N  iv  D  K 


When  Due 


I 
Amount      I  ate  When  and  How  Disposed  of 


<*— 


'jr— 


fa 

JU 


-2 


3+n+ 

Co 

Jo 

6* 

Co 

f* 
Co 
Co 
Jo 


'r- 


t- 


*j7 

JZ^f  — 


3f<? 
3<?<7 
3Affr 


>X 


7z 


2£L/ 


102       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

C c— Z i-     ,  <■!■ -  ,  rf  i-   r ~r r rl~r 

The  student  will  note  that  all  of  the  posting  that  it  is  necessary  to  do  from  the  Cash  Book  is 
done  in  the  illustration,  but  that  only  half  of  the  posting  that  it  is  necessary  to  do  from  the  Journal 
is  done  in  the  illustration.  The  other  part  of  the  posting  from  the  Journal  is  not  done  because 
the  Personal  accounts  to  which  the  Journal  entries  should  be  posted  are  not  shown  in  the  illustra- 
tion. The  student  of  course  knows  that  every  Journal  entry  must  be  posted  to  both  the  debit 
and  the  credit  side  of  the  Ledger,  and  that  whenever  the  Bills  Receivable  account  is  debited,  the 
Personal  account  of  the  person  giving  us  the  note  or  accepting  our  time  draft  must  be  credited, 
and  that  whenever  the  Bills  Payable  account  is  credited,  the  Personal  account  of  the  person  to 
whom  we  give  the  note,  or  whose  time  draft  we  accept,  must  be  debited. 

The  illustration  does  not  show  the  entries  that  had  been  made  to  the  Bills  Receivable  and 
Bills  Payable  accounts  prior  to  the  date  of  the  transactions  given  as  examples  for  the  illustration. 
It  shows  only  such  entries  as  were  occasioned  by  the  examples. 

EXERCISE  NO.   16. 

BILLS  RECEIVABLE  AND  BILLS  PAYABLE. 

JANUARY  2,  19—. 

Send  Perfection  Mattress  Co.  note  at  60  days  for  $300. 
Receive  from  L.  F.  Adams,  note  at  30  days  from  Jan.  1st  for  $683. 
Pay  note  due  Cedar  Rapids  Furniture  Co.,  $237. 

Have  Gold  Bros,  note  for  $150,  due  in  60  days  from  this  date,  discounted,  and  receive  from 
the  bank,  $148.45  for  it. 

3. 

Mr.  C.  N.  Roderick  paid  his  note  due  today,  $185. 

Receive  note  at  60  days  from  Jan.  7th  from  O.  J.  Bruce  in  settlement  of  account  $119.25. 

Accept  60  day  draft  of  Henderson,  Greene  &  Co.,  for  $347. 

4. 

Pay  our  note  due  Globe-Wernicke  Co.,  $325. 

Reitz  Bros,  renew  their  note  for  $125.  They  give  us  a  new  note  for  $125  due  in  30  days,  and 
pay  interest  due  on  old  note,  63e\ 

Send  Rivers  Furniture  Co.  a  90  day  note  for  $150. 

Receive  from  Oldershaw  &  Son,  $380,  in  payment  of  their  note  due  today. 

5. 

Jordan  Stabler  Co.  pay  us  $250  on  their  note  of  $536. 

Receive  note  at  30  days  from  Oliver  Brown  in  settlement  of  his  account,  $63  (note  30  days 
from  Jan.  2). 

Receive  from  F.  M.  Smith,  $51  in  payment  of  his  note  due  today. 

Bryant  &  Clarvoe  give  us  their  note,  due  60  days  from  today,  for  $399.07  in  settlement  of 
their  note  of  $179.63,  and  balance  on  their  account,  $219.44. 

We  send  the  Woolson  Spice  Co.,  our  note  at  60  days  for  $398,  renewing  our  note  of  like 
amount  and  enclose  our  check  for  $3.98  to  pay  the  interest  on  the  old  note. 

We  buy  from  Gambrill  Mfg.  Co.,  flour  worth  $187.50,  and  give  in  payment  our  note  due  60 
days  from  today. 

7. 

Accept  30  day  draft  of  Wilson  Furniture  Co.,  for  $500. 

Pay  note  due  Excelsior  Mfg.  Co.,  $390. 

Receive  from  Thomas  Brown  note  due  3  months  from  date,  $70. 


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MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      107 

EXERCISE  NO.  17. 

BILLS    RECEIVABLE    AND    BILLS    PAYABLE. 

Make  out  all  notes  given  by,  and  all  drafts  drawn  by  your  firm  in  exercises  17  and  18. 
begins  business  March  1,  (Monday)  with  a  cash  investment  of  $10,000     Buy 

(Student's  name) 

from  McGaw  &  Co.,  for  cash,  bill  of  groceries  amounting  to  $4800. 

Buy  from  Woolson  Spice  Co.,  bill  of  groceries  amounting  to  $5600,  giving  in  payment  your 
note  at  60  days  from  date,  with  interest. 

6. 

Sell  to  Snyder  &  Co.,  bill  of  groceries  amounting  to  $650,  receiving  in  payment,  their  note  at 
30  days. 

9. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  bill  of  groceries  amounting  to  $7540,  giving  in  payment 
your  note  at  30  days. 

12. 

Sell  to  Reitz  Bros.,  bill  of  groceries  amoimting  to  $1200,  receiving  in  payment,  their  note  at 
60  days,  with  interest. 
Pay  for  stamps,  $20. 

15. 

Sell  to  F.  W.  Johnson,  bill  of  groceries  amounting  to  $2500,  receiving  in  payment  two  notes, 
each  for  $1250,  the  first  payable  in  30  days  and  the  other  in  90  days. 

16. 

Buy  from  McGaw  &  Co.,  for  cash,  bill  of  groceries  amounting  to  $3200. 
Sell  to  Boyer  &  Co.,  bill  of  groceries  amounting  to  $250,  receiving  in  payment  their  note  at 
3  months. 

24. 

Sell  to  Maynadier  &  Co.,  bill  of  groceries  amounting  to  $1500,  receiving  their  note  at  30  days 
for  one  half  the  amount,  and  cash  for  the  balance. 

27. 
Sell  to  Jordan  Stabler  Co.,  on  account,  bill  of  groceries  amounting  to  $2500. 

29. 

Buy  from  National  Biscuit  Co.,  bill  of  groceries  amounting  to  $650,  giving  in  payment  Snyder 
&  Co.'s  note  received  on  the  6th  instant. 

30. 

Sell  to  F.  W.  Johnson,  for  cash,  bill  of  groceries  amounting  to  $275. 

Sell  to  Bryant  &  Clarvoe,  on  account,  bill  of  groceries  amounting  to  $850. 

Sell  to  Percy  M.  Reese,  bill  of  groceries  amounting  to  $925,  receiving  in  payment  his  note  at 
30  days  with  interest. 

Sell  to  Reitz  Bros.,  bill  of  groceries  amounting  to  $1500,  receiving  in  payment  their  sixty 
day  note  for  $500,  cash  $500,  balance  on  account. 

Pay  clerks,  $350. 

APRIL  1. 

Sell  to  Wm.  Jackson,  bill  of  groceries  amounting  to  $342.10,  receiving  in  payment  his  note  at 
60  days,  bearing  interest  at  6%. 


108       MODERN  BOOKKEEPING,  ACCOUNTING  AND   BUSINESS  PRACTICE. 

3. 

Buy  office  furniture  for  $350,  from  Hall,  Headington  &  Co.,  giving  a  note  at  30  days  in 
payment. 

Pay  for  stationery,  $38. 

5. 

Buy  from  McGaw  &  Co.,  on  account,  bill  of  groceries  amounting  to  $720. 
Sell  to  Jordan  Stabler  Co.,  for  cash,  bill  of  groceries  amounting  to  $362.40. 

8. 

Sell  to  F.  W.  Johnson,  bill  of  groceries  amounting  to  $425,  receiving  in  payment  his  note  at 
30  days. 

14. 

Give  Alex.  Yearly  &  Co.,  your  note  at  30  days  to  pay  rent  for  March  and  April,  $1500. 
Buy  from  McGaw  &  Co.,  bill  of  groceries  amounting  to  $1326.70,  for  which  accept  their 
draft  at  90  days. 

F.  W.  Johnson  pays  his  note  of  the  15th  ult.,  due  today. 

23. 

Maynadier  &  Co.,  pay  their  note  of  March  24th. 

29. 

Percy  M.  Reese  pays  his  note  of  March  30th  and  $4.62  interest. 

30. 

Pay  note  of  1st  ult.,  favor  of  Woolson  Spice  Co.,  and  $56  interest. 

Sell  Gold  Bros.,  bill  of  groceries  amounting  to  $625,  for  which  they  accept  your  draft  at  3 
months. 

Pay  clerks,  $350. 

MAY   3. 

Pay  note  favor  Hall,  Headington  &  Co., 

8. 

F.  W.  Johnson  renews  his  thirty-day  note  due  today,  giving  you  a  new  thirty-day  note  bearing 
interest  at  6%. 

11. 

Reitz  Bros,  pay  their  note  of  March  12th  due  today,  and  $12  interest. 

Sell  to  Boyer  &  Co.,  bill  of  groceries  amounting  to  $320,  receiving  in  payment  their  note  at 
60  days. 

15. 

Renew  your  note  due  today  in  favor  of  Alexander  Yearly  &  Company,  giving  a  new  thirty- 
day  note  bearing  interest  at  6%. 

20. 

F.  W.  Johnson  pays  his  90  day  note  of  March  15th,  less  discount  for  34  days,  (discount  $7.08). 

24. 

Sell  to  Reitz  Bros.,  bill  of  groceries  amounting  to  $1520,  receiving  in  payment  their  note  at 
30  days  for  $800,  and  cash  for  balance. 
Pay  for  advertising  in  "Sun,"  $150. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.      109 

28. 

Discount  at  the  bank  Boyer  &  Company's  note  of  the  11th  instant  and  receive  $317.55  for  it. 

31. 

Wm.  Jackson  pays  his  note  of  April  1st,  and  $3.42  interest  thereon. 
Pay  clerks,  $350. 

Take  a  trial  balance,  and  close  the  Ledger,  using  the  following  inventories;  Mdse.,  $13,092.20; 
Store  and  Office  Fixtures,  $350. 

EXERCISE  NO.  18. 

■  begins  a  Wholesale  Hardware  Business  Oct.  1,  (Tuesday)  with  the  following 

(Student's  name) 

investment:  Mdse.,  $5800;  Cash  $21,500;  Store  and  Office  Fixtures,  $1200;  C.  C.  Pursey  &  Co.'s 
note  for  $3600  for  thirty  days,  dated  Sept.  6th.;  Marshall,  Wescoat  &  Co.,  owe  him,  on  account, 
$2546.  He  owes  on  a  note  in  favor  of  Maryland  Hinge  Co.,  at  60  days,  dated  August  10  h,  $783, 
and  also  owes  National  Tool  &  Stamping  Co.,  on  account,  $1645. 

OCT.  7. 

Sell  to  Miles  Hardware  Co.,  bill  of  hdwe.  amounting  to  $296,  for  which  they  accept  your  draft 
at  30  days. 

Buy  from  Francis  Albert  &  Co.,  bill  of  hdwe.  amounting  to  $2400,  giving  in  payment  your 
note  at  60  days,  bearing  6%  interest. 

Pay  for  stamps,  $25. 

C.  C.  Pursey  &  Co.  pay  their  note  for  $3600  due  today. 

9. 

Accept  draft  drawn  by  National  Tool  &  Stamping  Co.,  at  30  days,  for  $645. 

Pay  rent,  $400. 

Pay  note  for  $783,  favor  of  Maryland  Hinge  Co. 

12.  .  . 

Sell  to  Frank  Beall  &  Co.,  bill  of  hdwe.  amounting  to  $1200,  receiving  in  payment  their  note 
at  30  days,  bearing  6%  interest. 

Buy  from  W.  H.  Cole  &  Son,  hdwe.  amounting  to  $324,60,  for  which  accept  their  draft  at 
30  days  in  favor  of  Chicago  Stamping  Co. 

Buy  additional  office  furniture,  $120. 

15. 

Marshall,  Wescoat  &  Co.,  accept  your  draft  at  30  days  for  $1000  favor  of  National  Tool  & 
Stamping   Co. 

Sell  to  J.  A.  Constantine  on  account,  bill  of  hdwe.  amounting  to  $523.10. 

Sell  Miller  Hardware  Co.,  bill  of  hdwe.  amounting  to  $1213,  receiving  in  payment  their  note 
at  60  days,  with  interest  at  6%. 

18. 

Sell  to  J.  R.  M.  Adams,  on  %,  bill  of  hdwe.  amounting  to  $215. 
Pay  for  cleaning  windows,  $15. 

24. 

Sell  to  Young  Bros.  &  Co.,  bill  of  hdwe.  amounting  to  $762,  receiving  in  payment  their  sight 
draft  on  Frank  Beall  &  Co. 


110       MODERN    BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

27. 

Buy  from  Maryland  Hinge  Co.,  on  account,  bill  of  hdwe.  amounting  to  $3400. 
Sell  to  A.  B.  Cochrane  for  cash,  bill  of  hdwe.  amounting  to  $280. 
Pay  gas  bill,  $34. 

Sell  to  Geo.  Keller,  Bill  of  hdwe.  amounting  to  $1862.20,  receiving  in  payment  his  note  at  60 
days.  J 

30. 

Sell  to  Union  Hardware  Co.,  bill  of  hdwe.  amounting  to  $2500,  receiving  in  payment  their 
note  at  30  days  for  $1750  and  draft  at  30  days  drawn  on  C.  S.  Pitcher  for  $750. 
Pay  clerks,  $400. 

NOV.  2. 

Sell  Frank  Beall  &  Co.,  bill  of  hdwe.  amounting  to  $285,  receiving  in  payment  his  note  at 
90  days. 

6. 

Sell  to  C.  S.  Pitcher,  on  account,  bill  of  hdwe.  amounting  to  $2500. 

Pay  Maryland  Hinge  Co.,  bill  of  Oct.  27  by  giving  them  a  sight  draft  which  you  draw  on 
Marshall,  Wescoat  &  Co.,  for  $1546,  and  cash  for  the  balance. 

8. 

Buy  from  Francis  Albert  &  Co.,  bill  of  hdwe.  amounting  to  $2000,  giving  in  payment  a  check 
for  $750,  and  your  note  at  30  days  for  the  balance. 
Pay  for  letter-heads  and  envelopes,  $105. 
Pay  your  acceptance  of  Oct.  9,  favor  of  National  Tool  &  Stamping  Co. 

11. 

Sell  Marshall,  Wescoat  &  Co.,  bill  of  hdwe.  amounting  to  $2400,  for  which  they  accept  your 
draft  at  30  days. 

Frank  Beall  &  Co.,  pay  their  note  of  Oct.  12  and  30  days'  interest  on  same,  $6. 

Buy  from  Wm.  H.  Cole  &  Son,  bill  of  hdwe.  amounting  to  $2500,  for  which  accept  their 
draft  at  30  days  favor  Vulcan  Iron  Works. 

Pay  your  acceptance  of  Oct.  12,  favor  of  Chicago  Stamping  Co. 

14. 

Have  discounted  at  the  bank  Marshall,  Wescoat  &  Co.'s  acceptance,  receiving  from  the 
bank  $2388.80  for  it. 

16. 

Buy  from  Frank  B.  Sloan  &  Co.,  bill  of  hdwe.  amounting  to  $5600,  giving  in  payment  your 
note  at  30  days. 

Pay  for  stationery,  $25. 

27. 

Sell  to  Cumberland  Hardware  Co.,  bill  of  hdwe.  amounting  to  $1,163.40,  receiving  in  pay- 
ment their  note  at  90  days. 

Buy  from  Henry  Disston's  Sons,  on  account,  bill  of  hdwe.,  amounting  to  $1536.30. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND   BUSINESS  PRACTICE.      Ill 

30. 

Receive  from  C.  S.  Pitcher  $750  in  payment  of  Union  Hardware  Co.'s  draft  on  him  in  your 
favor,  Oct.  30. 

Sell  to  J.  R.  M.  Adams,  bill  of  hdwe.  amounting  so  $293.20,  receiving  in  payment  his  note  at 
60  days. 

Union  Hardware  Co.  pay  their  note  of  Oct.  30. 

Pay  clerks,  $400.  |  , 

DEC.  1. 

Sell  to  A.  B.  Cochrane  &  Co.,  for  cash,  bill  of  hdwe.  amounting  to  $342.10. 
Sell  to  C.  C.  Pursey  &  Co.,  bill  of  hdwe.  amounting  to  $256.20,  receiving  in  payment  their 
note  at  30  days. 

Sell  to  Union  Hardware  Co.,  on  account,  bill  of  hdwe.  amounting  to  $386. 
Pay  freight,  $320. 

4. 

Pay  your  acceptance  of  the  11th  ult.  in  favor  of  the  Vulcan  Iron  Works,  less  discount  for  the 
time  it  has  to  run.     (Discount  $2.92). 

5. 

Pay  your  note  of  Oct.  6,  $2400,  favor  of  Francis  Albert  &  Co.     (Interest  on  same  $24). 
Buy  from  National  Tool  &  Stamping  Co.,  on  account,  bill  of  hdwe.,  amounting  to  $3220. 

8. 

Pay  your  note  of  Nov.  8,  favor  of  Francis  Albert  &  Co. 

Draw  draft  at  30  days  on  C.  S.  Pitcher,  $1750,  in  favor  of  National  Tool  &  Stamping  Co. 

10. 

'    Buy  of  Anderson  &  Ireland,  bill  of  hdwe.  amounting  to  $2957,  giving  in  payment  your  note  at 
30  days. 

14. 

Miller  Hardware  Co.  pay  their  note  of  Oct.  15th.     (Interest  $12.13). 

19. 

Frank  Beall  &  Co.  pay  their  note  of  Nov.  2,  less  discount  for  43  days.     (Discount  $2.04). 

26. 

George  Keller  pays  his  note  of  Oct.  27th. 

31. 

C.  C.  Pursey  &  Co.  pay  their  note  of  Dec.  1. 
Pay  clerks,  $400. 

Take  a  Trial  Balance  and  close  the  books,  using  the  following  inventories:  Mdse.  $19,486.20; 
Store  and  Office  Fixtures,  $1200;  Expense,  $250. 


112       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

WRITTEN  TEST  NO.  8. 

1.  What  is  a  promissory  note?  Draw  up  one  for  $1000  at  60  days,  dated  Dec.  1,  19 — ,  in 
favor  of  John  Wanamaker.  Make  it  payable  at  807  Chestnut  St.  Omit  signature.  (Never 
sign  a  note  unless  you  mean  to  pay  it). 

2.  Name  the  parties  to  a  note. 

3.  What  are  notes  used  for? 

4.  What  do  you  mean  by  Bills  Receivable  account?  When  is  this  account  debited?  When 
is  it  credited? 

5.  What  entry  is  made  when  we  transfer  a  note  to  a  third  party?  When  part  payment  is 
made  on  a  note? 

6.  When  there  is  a  balance  in  the  Bills  Receivable  account,  on  which  side  do  you  find  it? 
What  does  it  show? 

7.  What  is  an  inventory?  How  do  we  take  an  inventory?  What  is  meant  by  taking  stock? 
Why  is  an  inventory  taken?    When? 

8.  How  is  the  gain  or  loss  found  on  Mdse.  account?     How  is  mdse.  account  forwarded? 

9.  Into  what  account  is  Mdse.  account  closed?     Expense? 

10.  What  does  the  credit  side  of  Loss  &  Gain  account  show?    The  debit  side?    The  differ- 
ence?    Into  what  account  is  Loss  &  Gain  closed? 

11.  What  do  we  find  in  the  proprietor's  stock  account? 

12.  To  what  account  and  to  which  side  do  you  carry  the  gain  shown  by  the  Loss  &  Gain 
account?    The  loss? 

13.  What  does  the  balance  of  the  proprietor's  stock  account  show  after  the  books  are  closed? 
If  on  the  debit  side?     If  on  the  credit  side? 

14.  What  is  meant  by  closing  the  Ledger?     How  often  should  books  be  closed?    For  what 
purpose? 

15.  What  accounts  do  you  make  entries  in  at  the  time  of  closing  books? 

16.  In  closing  books  where  and  why  do  you  use  red  ink? 

17.  How  do  you  forward  personal  accounts? 

18.  What  should  you  write  in  the  accounts? 

19.  What  should  you  write  on  the  debit  side  of  Jas.  Stein's  account : 

When  you  sell  him  mdse? 
Pay  him  money? 
Give  him  a  note? 

Return  to  him  mdse.  you  have  bought  of  him? 
Do  work  for  him? 
What  would  you  write  in  the  credit  side,  should  these  values  pass  from  him  to  you? 

20.  What  does  the  difference  between  the  resources  and  liabilities  of  a  business  show  at  the 
time  of  opening  the  books?    At  the  time  of  closing  the  books? 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.      113 

PRACTICE  IN  BOOKKEEPING. 

From  the  preceding  pages,  you  have  learned  the  elementary  theory  of  Double  Entry  Book- 
keeping, and  you  are  now  ready  to  put  the  theory  into  practice  by  keeping  complete  sets  of  books 
by  Double  Entry. 

CLASSIFICATION  OF  BOOKS. 

100.  The  books  used  in  bookkeeping  are  classified  as  follows: — Books  of  Original  Entry, 
Books  of  Subsequent  Entry,  and  Auxiliary  Books. 

101.  Books  of  Original  Entry  are  the  books  in  which  the  first  record  of  any  transaction  is 
made.  The  chief  books  of  original  entry  are  the  Cash  Book,  the  Journal,  the  Invoice  Book,  the 
Sales  Book,  the  Voucher  Register,  and  sometimes  the  Bill  Book.  Books  of  Original  Entry  are  the 
books  which  will  be  admitted  as  evidence  in  court.  In  order  that  they  may  be  used  as  evidence 
they  should  be  entirely  free  from  erasures  and  should  contain  full,  clear,  explanations  of  the  trans- 
actions recorded  in  them.  If  an  error  has  been  made,  it  can  be  corrected  by  ruling  two  red  lines 
through  it  and  writing  the  correct  entry  above  the  one  that  is  crossed  out  or  by  making  a  counter 
entry  with  a  proper  explanation  and  then  making  the  correct  entry. 

102.  Books  of  Subsequent  Entry  are  books  into  which  entries  are  posted  or  transferred  from 
other  books.     The  Ledger  is  the  chief  book  of  subsequent  entry. 

103.  Auxiliary  Books  are  books  other  than  books  of  original  entry  and  books  of  subsequent 
entry,  which  are  kept  to  supply  information  about  the  business.  Among  the  Auxiliary  Books  in 
most  common  use  are  Check  Books,  Bill  Books,  Receipt  Books  and  Order  Books. 

ARRANGING  ACCOUNTS  IN  THE  LEDGER. 

104.  It  is  customary  with  bookkeepers  to  keep  the  proprietors'  stock  accounts,  the  proprie- 
tors' private  accounts,  and  the  general  business  accounts  such  as  the  Merchandise  Account,  the 
Store  and  Office  Fixtures  Account,  the  Teams  and  Auto  Trucks  Account,  Stable  and  Garage  Ex- 
pense Account,  Real  Estate  Account,  Real  Estate  Expense  Account,  the  Bills  Receivable  Ac- 
count, the  Bills  Payable  Account,  the  Merchandise  Discount  Account,  the  Expense  Account,  and 
the  Loss  and  Gain  Account  in  the  first  part  of  the  Ledger. 

The  accounts  with  persons  from  whom  the  firm  buys  are  grouped  in  another  part  of  the  Ledger, 
or  are  sometimes  kept  in  a  separate  Ledger  known  as  the  Purchase  Ledger,  and  the  accounts  with 
the  persons  to  whom  the  firm  sells  are  grouped  in  still  another  section  of  the  Ledger  or  are  kept  in 
a  separate  Ledger  known  as  the  Customers'  Ledger. 

The  bookkeeper  from  his  knowledge  of  the  business,  can  usually  estimate  with  a  fair  degree 
of  accuracy  about  what  space  should  be  allowed  in  the  Ledger  for  each  account.  The  student  in 
ruling  the  Ledger  for  the  succeeding  sets,  until  further  notice,  may  allow  a  full  page  for  the  Mer- 
chandise account,  half  a  page  for  all  other  business  accounts,  and  one-fourth  page  for  each  personal 
account. 

INDEXING  THE  LEDGER. 

105.  Every  account  in  the  Ledger  should  be  entered  in  the  index  at  the  time  that  the  head- 
ing for  the  account  is  written  in  the  Ledger.  A  Ledger  index  is  arranged  alphabetically  and  may 
be  found  in  the  front  of  the  Ledger  or  it  may  be  a  separate  book  or  a  card  index.  When  the  name 
of  the  account  is  written  in  the  index,  the  number  of  the  page  in  the  Ledger  on  which  the  account 
appears  should  be  written  after  it.  In  a  small  Ledger  such  as  is  used  in  these  practice  sets,  index- 
ing may  not  seem  to  be  of  much  consequence,  but  the  student  should  form  correct  habits  with 
reference  to  indexing  right  from  the  start.  In  actual  business,  where  a  Ledger  may  contain  sev- 
eral hundred  pages,  if  an  accoimt  has  not  been  properly  indexed  when  it  is  opened,  it  may  be  neces- 
sary for  the  bookkeeper  to  spend  a  lot  of  time  hunting  for  the  account  when  he  wishes  to  post  to 


114       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

it,  or  failing  to  find  the  account,  the  bookkeeper  may  think  he  has  no  such  account  and  may  open 
a  second  account  with  the  same  person  or  thing,  in  which  case  neither  account  will  be  complete 
until  the  mistake  is  discovered  and  the  two  accounts  are  united  in  one  place. 

106.  In  posting,  a  busy  bookkeeper  can  sometimes  save  considerable  time  by  having  a  jun- 
ior clerk,  before  the  posting  is  begun,  look  up  the  Ledger  pages  in  the  index  and  mark  in  the  folio 
column  opposite  each  item  in  the  Cash  Book  and  opposite  each  item  in  the  Journal,  the  Ledger- 
page  to  which  the  item  is  to  be  posted.  If  this  is  done,  the  bookkeeper  as  he  does  the  posting 
should  make  a  check  mark  of  some  kind  as  each  item  is  posted  to  indicate  that  the  posting  has 
actually  been  done. 

107.  A  Card  Ledger  Index  is  a  convenient  form  of  index  for  a  bookkeeper's  use,  since  it  can 
be  consulted  without  turning  over  or  closing  a  large  Ledger  every  time  the  index  is  consulted. 

Another  plan  adopted  by  many  bookkeepers  is  to  keep  a  card  on  which  the  accounts  most 
frequently  needed  in  posting  are  listed  alphabetically  with  their  page  numbers.  This  card  can 
be  consulted  at  a  glance  and  for  that  reason  is  much  quicker  for  the  accounts  that  it  covers  than 
either  a  regular  index  or  a  card  index. 

Probably  the  majority  of  bookkeepers  soon  memorize  the  page  numbers  of  all  accounts  to  which 
they  post  at  all  frequently  and  thus  save  the  trouble  of  consulting  any  form  of  index  except  for 
accounts  to  which  posting  is  of  infrequent  occurrence. 

SET  1. 

WHOLESALE   PAPER  BUSINESS. 

108.  In  this   set   use   the   following   accounts,    besides  the   necessary   personal    accounts: 
.Stock  Account,  Private    Account,   Merchandise,  Expense,  Store 


(Student's  name)  (Student's  name) 

and  Office  Fixtures,  Teams,  Teams  Expense  Account,  Interest  and  Discount,  Merchandise  Dis- 
count, Bills  Receivable,  Bills  Payable,  and  Loss  and  Gain  Account. 

109.  Do  not  get  "Interest  and  Discount"  and  "Merchandise  Discount"  confused.  In- 
terest and  Discount  is  the  account  used  for  the  interest  or  discount  on  notes  or  drafts  and  time 
is  an  element  in  the  computation  of  the  interest  or  the  discount.  Merchandise  Discount  is  the 
account  used  for  all  deductions  from  the  face  of  a  bill  of  merchandise  for  prompt  payment,  or  pay- 
ment within  a  specified  time.  It  is  simply  a  certain  per  cent,  of  the  face  of  the  bill  and  is  computed 
without  reference  to  time.  The  per  cent,  of  discount  and  the  time  within  which  it  may  be  claimed 
are  stated  in  the  terms  of  the  bill.  Merchandise  discount  often  goes  by  the  name  of  "Cash 
Discount." 

110.  The  person  who  sells  goods  "on  account,"  unless  there  is  some  understanding  to  the 
contrary,  usually  expects  the  purchaser  to  pay  for  the  goods  before  the  10th  of  the  month  follow- 
ing the  month  in  which  the  sale  is  made.  All  goods  that  you  sell  in  this  business,  unless  otherwise 
specified,  are  sold  subject  to  the  terms  2/10  N/30,  which  means  that  you  will  allow  2%  discount 
for  cash  if  the  bill  is  paid  within  10  days  from  the  date  of  the  sale  or  will  expect  payment  without 
any  discount  in  30  days  from  the  date  of  the  sale. 

JANUARY  2. 

.begins  a  Wholesale  Paper  Business  January  1,  with  a  cash  investment  of  $10,000. 


(Student's  name) 

Pay  for  one  month's  rent  of  store,  $50;  for  office  desk,  $65;  books,  stationery,  etc.,  $37.50. 
Buy  two  horses,  $175;  two  sets  of  harness,  $50;  wagon,  $100. 

Receive  from  Smith,  Dixon  &  Co.,  on  account,  invoice  of  paper  amounting  to  $1,560. 
Pay  one  year's  dues  for  membership  in  the  International  Creditors'  Association,  $48. 
Pay  for  stamps,  $2,  for  bill-heads  and  letter-heads,  $34. 

Take  out  insurance  policy  for  one  year  in  Hartford  Insurance  Co.,  \°/0  on  $5,000,  $25. 
Do  your  posting  after  each  day's  transactions. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND   BUSINESS  PRACTICE.      115 

3. 

Sell  to  Williams  &  Wilkins  Co.,  10,000  lbs.  Butchers'  Manilla  at  2£  9,000  lbs.  Jute  Manilla 
at  6p.  Terms;  2/10  N/30.  (When  no  address  is  given  it  is  understood  that  the  person  is  one  of 
our  city  customers.  Always  place  the  address  at  the  head  of  every  Personal  account  in  the  Led- 
ger.) 

Receive  invoice  of  paper  from  National  Paper  Co.,  New  York,  for  $1,840,  2/10  N/30. 

Fay  for  two  office  chairs,  $6;  for  linoleum  for  office  floor,  $26.75. 

4. 

Receive  from  Weston  Paper  Co.,  Davis,  W.  Va.,  invoice  of  paper  for  $2,400.  2/10  N/30. 
Sell  J.  E.  Hurst  &  Co.,  100  reams  Butchers'  Manilla  at  40^,  1,000  lbs.  Manilla  No.  1  at  2f  0. 
Sell  Pearre  E.  Crowl  Co.,  10  reams  Weston's  Ledger  at  $12  a  ream,  1,000  lbs.  Tagboard  at  3^. 
Sell  Geo.  Murphy  900  lbs.  Letter-heads  at  11^,  1,200  lbs.  Bill-heads  at  10^,  4,000  lbs.  Gray 
Manilla  at  $1.50  per  cwt. 

Pay  for  Underwood  Typewriter,  and  desk,  $160,  letter-press  and  copying  books,  $26.25. 

5. 

Receive  from  Williams  &  Wilkins  Co.,  check  in  full  of  their  account  of  the  3rd  instant,  less 
discount. 

Receive  from  the  Cumberland  Paper  Co.,  Cumberland,  Md.,  invoice  of  paper  amounting  to 
$1,580,  2/10  N/30. 

Sell  to  H.  J.  Fosnot,  York,  Pa.,  900  lbs.  Colored  Flats  at  7&  1,0.00  lbs.  Extra  Fine  Flats  at  9£, 
10,000  lbs.  R.  R.  Manilla  at  U,  2,500  lbs.  Colored  Express  at  4^. 

Sell  W.  W.  Trout  &  Co.,  Norfolk,  Va.,  3,000  lbs.  No.  2.  Manilla  at  3^,  5,000  lbs.  No.  1  Manilla 
at  2|c. 

Sell  J.  F.  Clark,  Salisbury,  Md.,  1,000  reams  Light  Straw  at  25^  per  ream,  1,000  lbs.  Gray 
Manilla  at  $1.50  per  cwt.,  1,000  lbs.  Jute  Manilla  at  6&  1,300  lbs.  Tagboard  at  3£. 

,   Pay  salaries  as  follows:  Bookkeeper  $12,  Stenographer  $8,  Driver  $10,  Office  Boy  $3. 

7. 

Proprietor  withdraws  for  private  use,  $50. 

Pay  for  rent  of  stable  one  month,  $10,  for  feed  for  horses,  $8.50. 

Cash  sales  for  day  amount  to   $75.80. 

Send  Smith,  Dixon  &  Co.,  a  check  to  pay  bill  of  the  2nd  instant,  less  discount  of  2%. 

Pay  for  two  store  trucks,  $10. 

Cash  sales,  $52.30. 

9. 

Sell  to  World  Publishing  Co.,  9,500  lbs.  Manilla  at  2&  3,500  lbs.  Tagboard  at  Zi,  1,521  lbs. 
Extra  Fine  Flats  at  9&  6,240  lbs.  Colored  Flats  at  7^. 

Sell  A.  S.  Abell  &  Co.,  2,500  lbs.  Jute  Manilla  at  6&  2,000  reams  Butchers'  Straw  at  40^  per 
ream. 

Sell  Friedenwald  Co.,  100  reams  Weston's  Ledger  at  $12  per  ream,  800  lbs.  Letter  Heads  at  ll£ 

Have  office  partition  put  up  worth  $240,  for  which  give  Wm.  C.  Dulany  your  note  due  60 
days  from  date. 

Cash  sales,  $72.40. 


116       MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

10. 

Buy  from  Smith,  Dixon  &  Co.,  1/10  (1/10  indicates  the  date  of  the  invoice,  Jan.  10)  $3,420, 
2/10  N/60. 

Buy  from  National  Paper  Co.,  New  York,  $1,735.20,  2/10  N/30. 
Pay  gas  bill  for  private,  residence,  $8.50. 

(Student's  name) 

Cash  sales,  $45.80. 

11. 

Sell  L.  R.  Guthbert  on  his  note  at  30  days,  2,700  lbs.  Packet-heads  at  llc\  2,100  lbs.  Extra 
Flats  at  9£,  2,200  lbs.  letter-heads  at  llc\ 

Pay  freight,  $48.60,  5,000  Statements  $12. 
Cash  sales,  $126.30. 

12. 

Receive  check  from  J.  E.  Hurst  &  Co.  in  payment  of  their  bill  of  the  4th  instant,  less  discount 
of  2%. 

Receive  check  from  Pearre  E.  Crowl  Co.  in  payment  of  their  bill  of  the  4th  instant  less  dis- 
count of  2%. 

Pay  salaries:  Bookkeeper  $12,  Stenographer  $8,  Driver,  $10,  Office  Boy,  $3. 

Cash  sales,  $48.65. 

14. 

Send  check  to  the  National  Paper  Co.  in  settlement  of  invoice  of  3rd  inst.,  also  to  Weston 
Paper  Co.  in  settlement  of  invoice  of  the  4th  inst.    Deduct  2%  discount  in  both  cases. 

Receive  from  Geo.  Murphy  his  check  in  full  of  his  bill  of  the  4th  instant,  less  discount. 
Cash  sales,  $72.40. 

15. 

Send  Cumberland  Paper  Co.  check  for  bill  of  the  5th  instant,  less  discount. 

Pay  plumber's  bill,  $41.60. 

You  may  now  take  a  trial  balance,  after  which  you  may  make  out  a  Six  Column  Statement, 
using  the  following  inventories: 

Stock  of  paper $5,640 .92 

Office  desk 60.00 

Books,  stationery,  etc 30 .  00 

Partition,  in  office 240 .00 

Two  horses 175 .00 

Wagon 100 .00 

Linoleum 15 .  00 

Office  chair 5.00 

Two  sets  of  harness 45 .  00 

Stamps 1 .  10 

Unexpired  Insurance 24 .  00 

Typewriter  and  desk 150 .00 

Letter  press  and  copying  books 24 .  00 

Two  store  trucks 9 .  00 

Prepaid  rent  of  store 25 .  00 

Unexpired   membership   in   International   Cred- 
itors' Association 46 .  00 


MODERN  BOOKKEEPING,    ACCOUNTING  AND  BUSINESS  PRACTICE.      117 

111.  You  should  form  the  habit  of  reviewing  your  work  before  presenting  it  to  your 
teacher  for  approval. 

Ilia.  See  that  a  full,  clear  explanation  of  every  transaction  is  made  in  some  book  of  original 
entry, — that  is,  the  book  in  which  an  account  of  the  transaction  is  first  entered,  as  the  Cash  Book 
or  the  Journal. 

lllb.  See  that  the  date  of  the  invoice,  note,  or  acceptance  paid,  is  entered  in  the  Cash  Book 
as  part  of  the  explanation  in  any  entry  covering  interest  or  discount. 

111c.  See  that  payments  properly  chargeable  to  expense  or  to  subdivisions  of  that  account 
are  not  charged  to  fixtures,  teams  and  wagons,  automobiles,  real  estate,  buildings,  or  other  ac- 
counts representing  the  assets  of  the  business. 

11  Id.     See  that  there  is  no  omission  of  book  folios  in  posting. 

llle.  Follow  the  Six  Column  Statement  in  closing  the  books  and  see  that  the  Loss  and  Gain 
Account  agrees  exactly  in  all  its  parts  with  the  Loss  and  Gain  columns  of  the  Statement;  that  the 
Present  Worth  brought  down  in  the  Proprietor's  Stock  Account  agrees  with  the  Present  Worth 
on  the  statement.  Do  not  fail  to  bring  down  the  Present  Worth,  Inventories,  and  Balances,  and 
check  the  items  on  the  Statement  as  each  accoimt  in  the  Ledger  is  found  by  actual  examination 
and  comparison  to  agree  with  it. 

11  If.  See  that  the  pencil  balance  of  each  account  shows  right  on  the  face  of  the  Ledger  in 
the  explanation  space  on  the  larger  side  of  the  account.  See  that  this  pencil  balance  agrees  with 
the  balance  shown  on  the  Statement  sent  out  to  the  customer  at  the  end  of  the  month.  This 
pencil  balance  will  be  the  first  item  on  the  Statement  sent  out  at  the  end  of  the  following  month. 
See  that  pencil  figures,  whenever  addition  is  elone,  are  right  up  against  the  last  fine  used  for  ink 
figures  and  not  larger  than  one-fourth  of  a  space  high.  If  made  and  placed  as  directed,  the  pencil 
figures  need  never  be  erased  and  will  be  of  material  advantage  to  the  bookkeeper  later  on. 

112.  When  the  Six  Column  Statement  has  been  finished,  you  will  present  it  to  the  teacher 
for  approval  after  which  you  may  close  the  ledger. 

113.  After  closing  the  Ledger,  present  all  books  for  approval. 

WRITTEN  TEST  NO.  9. 

1.  What  advantage  is  derived  from  subdividing  the  Expense  account? 

2.  Why  is  the  proprietor's  Private  account  opened?     When  debited?    When  credited? 

3.  Into  what  account  is  the  prooprietor's  Private  account  closed?     When? 

4.  If  a  cash  account  is  kept  in  the  Ledger  what  amounts  are  posted  to  it?    When? 

5.  Why  do  you  carry  the  debits  in  the  Cash  Book  to  the  credit  side  of  accounts  in  the  Led- 
ger?   The  credits  to  the  debit  side  of  accounts? 

6.  What  is  meant  by  Ledger  folio  columns?     What  do  you  place  in  them? 

7.  Why  are  diagonal  rulings  placed  in  Ledger  accounts? 

8.  How  do  you  correct  errors  in  the  Journal?     Cash  Book?     Ledger? 

9.  Name  in  their  order  the  several  steps  to  be  taken  when  closing  the  Ledger. 

10.  What  are  resources?     Liabilities? 

11.  If  a  Trial  Balance  does  not  balance  what  should  be  done? 

12.  Does  the  Trial  Balance  prove  the  Ledger  to  be  absolutely  correct? 

13.  What  errors  can  there  be  in  the  Ledger  when  the  Trial  Balance  balances? 

14.  What  means  have  business  men  other  than  the  Trial  Balance  of  proving  the  Ledger 
correct? 

15.  Tell  of  two  ways  to  find  the  Present  Worth  or  Net  Capital?    The  Net  Gain? 

16.  Posting  $104  to  the  wrong  side  of  an  account  would  throw  your  Trial  Balance  out  how 
much?  How  would  you  look  for  errors  of  this  sort? 


118       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

COLUMNAR   BOOKS. 

114.  In  the  work  done  thus  far,  we  have  used  only  the  simplest  forms  of  ruling  in  our  book- 
keeping but  in  most  large  businesses,  forms  of  ruling  are  used  which  save  the  bookkeeper  consid- 
erable work  and  time,  thus  enabling  each  bookkeeper  to  keep  the  records  for  a  larger  volume  of 
business.     Columnar  books  are  one  of  the  most  important  labor  saving  devices. 

115.  If  a  Cash  Book  with  three  money  columns  on  each  side  is  used,  the  first  money  column 
on  the  debit  side  may  be  used  for  Miscellaneous  Credits,  the  second  money  column  on  the  debit 
side  may  be  used  for  Merchandise  Credits  and  the  third  money  column  on  the  debit  side  may  be  used 
as  a  Total  column.  You  will  note  that  this  is  an  addition  of  just  one  money  column  on  the  debit 
side  of  the  cash  book, — the  column  for  Merchandise  Credits.  In  a  Cash  Book  of  this  kind,  when- 
ever money  is  received  from  the  sale  of  Merchandise  for  cash,  the  amount  received  is  extended 
into  the  Merchandise  Cr.  column  and  this  amount  need  not  be  posted  to  the  credit  side  of  the  Mer- 
chandise account  separately,  but  the  Merchandise  Cr.  column  can  be  totaled  and  forwarded  from 
page  to  page  until  the  end  of  the  month,  at  which  time  the  Merchandise  account  can  be  credited 
in  one  entry  for  the  total  amount  of  the  cash  sales  of  merchandise  during  the  month.  In  order  to 
avoid  danger  of  posting  these  Merchandise  credits  separately,  it  is  well  at  the  time  the  entry  is 
made  and  extended  into  the  Merchandise  Cr.  column,  to  make  a  check  mark  in  the  folio  column 
in  the  cash  book,  thus  indicating  that  the  item  is  not  to  be  posted  separately  but  will  be  included 
in  the  total  to  be  posted  at  the  end  of  the  month.  Of  course,  all  cash  received  from  other  sources 
than  from  the  sale  of  merchandise  for  cash,  is  extended  into  the  miscellaneous  column  on  the  debit 
side  of  the  Cash  Book  and  each  item  is  posted  separately  as  heretofore. 

116.  If  a  Cash  Book  has  three  money  columns  on  the  credit  side,  the  first  money  column  is 
usually  used  for  Miscellaneous  Debits,  the  second  money  column  is  usually  used  for  Expense  Debits 
and  the  third  money  column  is  used  as  a  Total  column.  In  a  Cash  Book  of  this  kind  whenever 
money  is  paid  for  anything  that  should  be  charged  to  Expense,  the  money  paid  is  extended  into 
the  Expense  Dr.  column  and  a  check  mark  is  put  in  the  folio  column  to  show  that  this  item  need  not 
be  posted  separately  and  this  Expense  Dr.  column  is  added  and  forwarded  from  page  to  page  until 
the  end  of  the  month,  at  which  time  the  debits  for  the  entire  month  can  be  carried  to  the  Ex- 
pense account  in  one  entry. 

117.  For  an  illustration  of  a  Cash  Book  with  a  Merchandise  Cr.  column  on  the  debit  side, 
and  an  Expense  Dr.  column  on  the  credit  side,  see  pages  120  and  121. 

118.  You  will  note  that  the  keeping  of  these  special  columns  saves  much  of  the  time  that 
would  otherwise  be  spent  in  posting  and  that  just  the  same  thing  is  accomplished  as  by  posting 
each  of  the  items  under  consideration  separately. 

119.  Firms  frequently  classify  their  receipts  and  expenditures  in  such  a  way  as  to  enable 
them  to  use  several  special  columns  on  each  side  of  the  Cash  Book  to  advantage  and  when  this  is 
the  case,  each  column  is  treated  just  like  the  Merchandise  and  Expense  columns  explained  above. 

120.  In  the  Journal,  special  columns  can  be  used  to  just  as  much  advantage  as  in  the  cash 
book.  In  a  three  column  Journal,  the  first  column  may  be  used  for  Merchandise  Debits,  the  sec- 
ond column  for  Miscellaneous  Debits  and  the  third  column  for  Credits.  In  a  Journal  of  this  kind, 
the  Merchandise  Debits  are  all  entered  in  the  Merchandise  Dr.  column  and  instead  of  being  posted 
separately,  they  are  totaled  and  carried  forward  from  page  to  page  until  the  end  of  the  month  and 
then  the  Merchandise  account  is  debited  in  one  entry  for  the  whole  amount.  All  other  debits 
are  extended  into  the  Miscellaneous  Dr.  column  and  each  of  these  is  posted  separately  as  hereto- 
fore. All  credits  in  a  three  column  Journal  of  this  kind  are  also  posted  separately.  For  an  illus- 
tration of  a  three  column  Journal  such  as  has  just  been  described,  see  page  122. 

121.  In  a  four  column  Journal  the  first  column  may  be  used  for  Merchandise  Debits,  the 
second  column  for  Miscellaneous  Debits,  the  third  column  for  Miscellaneous  Credits  and  the  fourth 
column  for  Merchandise  Credits.     In  a  Journal  of  this  kind,  the  Merchandise  Debits  are  all  ex- 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      119 

tended  into  the  Merchandise  Dr.  column  and  the  Merchandise  Credits  are  all  extended  into  the 
Merchandise  Credit  column  and  instead  of  being  posted  separately  these  amounts  are  totaled  and 
carried  forward  from  page  to  page  until  the  end  of  the  month  and  the  totals  are  posted  to  the  debit 
and  credit  sides  respectively  of  the  Merchandise  account.  All  other  debits  are,  of  course,  ex- 
tended into  the  Miscellaneous  Dr.  column  and  all  other  credits  are  extended  into  the  Miscellaneous 
Cr.  column,  and  each  of  these  items  is  posted  separately  to  the  appropriate  account. 

For  an  illustration  of  a  four  column  Journal  such  as  has  just  been  described,  see  page  123. 

SET  2. 

122.  In  this  set  you  may  use  a  Cash  Book  with  three  money  columns  on  each  side,  using  the 
extra  column  on  the  debit  side  for  Merchandise  Credits  and  the  extra  column  on  the  credit  side 
for  Expense  Debits.  A  four  column  Journal  may  also  be  used.  Use  the  special  columns  for  Mer- 
chandise Debits  and  Merchandise  Credits. 

The  transactions  in  this  set  are  a  continuation  of  the  business  conducted  in  the  preceding  set, 
therefore  do  not  open  a  new  set  of  accounts  in  the  Ledger,  but  use  those  already  opened. 

WHOLESALE     PAPER     BUSINESS     OF CONTINUED. 

Student's  name 

JANUARY  16. 

Buy  of  Smith,  Dixon  &  Co.,  invoice  of  paper  amounting  to  $3,120.24,  2/10  N/30. 

Sell  to  Williams  &  Wilkins  Co.,  3,400  lbs.  Letter-heads  at  11^. 

Receive  from  H.  J.  Fosnot,  check  for  bill  of  the  5th  instant,  less  2%  discount. 

Sell  to  J.  E.  Hurst  &  Co.,  1,500  reams  light  straw  at  25^  per  ream. 

Receive  check  from  W.  W.  Trout  &  Co.  for  bill  of  the  5th  instant,  less  2%  discount. 

Pay  for  having  horse  shod,  $4.75. 

Cash  sales,  $39.25. 

17. 

Sell  Pearre  E.  Crowl  Co.,  25,000  lbs.  Gray  Manilla  at  $1.50  per  hundred  lbs. 
Sell  A.  S.  Abell  Co.,  50  reams  Weston's  Ledger  at  $12  per  ream,  receiving  their  note  at  30 
days  for  one-half  the  amount,  balance  on  account. 

Pay  rent  on  private  dwelling,  $25. 

(Student's  name) 

Sell  the  World  Publishing  Co.,  1,520  lbs.  Tagboard  at  3^. 
Pay  for  stamps,  $3.50. 
Cash  sales,  $39.40. 

18. 
Buy  stationery  for  office  use,  $3.87. 
Pay  for  feed  for  horses,  $5.60. 
Sell  George  Murphy,  5,600  lbs.  Jute  Manilla  at  6£. 
Sell  J.  F.  Clark,  2,400  lbs.  Extra  Fine  Flats  at  llji. 
Cash  sales,  $52.81. 
Pay  Smith,  Dixon  &  Co.  for  bill  received  the  10th  instant,  less  2%  discount. 

19. 

Receive  from  World  Publishing  Co.,  check  for  bill  of  the  9th  instant,  less  discount. 

Receive  from  A.  S.  Abell  Co.,  check  for  bill  of  9th  inst.  less  discount. 

Pay  $8  for  ton  of  hay  for  horse. 

Sell  Friedenwald  Co.,  2,300  lbs.  R.  R.  Manilla  at  4£ 

Pay  salaries  as  follows:  Bookkeeper,  $12,  Stenographer,  $8,  Driver,  $10,  Office  Boy  $3. 

Cash  Sales,  $121.40. 


120 


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124       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

21 

Sell  Pearre  E.  Crowl  Co.    13,000  lbs.  Gray  Manilla  at  $1.50  per  hundred  lbs. 

Pay  freight  on  invoice  received  from  Smith,  Dixon  &  Co.,  $42.60 

wi  hdraws  for  personal  use  $230.  (When  a  check  is  written  for  money  that  the 

(Student's  name) 

propiie  or  draws  for  his  own  private  use,  the  check  shou'd  be  made  payable  to  the  order  of  the 
proprietor's  name;  when  a  check  is  written  for  nxney  that  is  to  be  used  in  the  business,  the  check 
should  be  made  payable  to  the  order  of  Cash) 

Sell  H.  J.  Fosnot,  3,250  lbs.  Jute  Mania  at  6j4. 

L.  R.  Guthbert  prepaid  his  note  of  the  11th  .'nstant,  less  22  days'  interest. 

Buy  two  new  chairs  for  office,  $5.75. 

Pay  for  floor  brush,  $3.50. 

Cash  sales,  $285.60. 

22. 

Sell  Geo.  Murphy  on  his  note  at  30  days,  3,210  lbs.  Colored  Flats  at  7£,  2,950  lbs.  Bill-heads 
at  11£ 

Pay  for  repairs  to  wagon,  $5.60. 

Buy  of  Parsons  Paper  Co.,  Holyoke,  Mass,  invoice  of  paper  amounting  to  $2,150  62,  2/10 
N/30. 

Sell  Williams  &  W.lkins  Co.,  2,460  lbs.  Packet-heads  at  11^,  3,200  lbs.  Letter-heads  at  11**. 

Cash  sales,  $230.01. 

23. 

Receive  check  from  Williams  &  Wilkins  Co.,  for  bill  of  the  16th  instant,  less  2%. 

Sell  W.  W.  Trout  &  Co.,  3,300  lbs.  Bill-heads  at  11^,  4,100  lbs.  R.  R.  Manilla  at  4£  receiving 
their  note  at  30  days  for  one-half  the  amount,  balance  on  account. 

Send  check  to  Parsons  Paper  Co.  for  $1,225  in  part  payment  of  bill  bought  yesterday,  dis- 
count, $24.50. 

Pay  for  advertisement  in  "Sun,"  $25. 

Cash  Sales,  $124.32. 

24. 

Sell  Geo.  Murphy  100  reams  Weston's  Ledger  paper  at  $12  per  ream. 
Receive  from  J.  E.  Hurst  &  Co.,  check  in  full  for  bill  of  the  16th  instant,  less  2%  discount. 
Pay  for  having  harness  repaired,  $2.50. 

Receive  from  Pearre  E.  Crowl  Co.,  check  for  $269.50  in  part  payment  of  bill  of  the  17th 
instant,  discount  $5.50. 
Cash  sales,  $95. 

25. 

Buy  of  National  Paper  Co.,  invoice  of  paper  amounting  to  $1,320.68,  2/10  N/30. 
Sell  H.  J.  Fosnot,  850  reams  Light  Straw  at  25^  per  ream. 

Sell  Friedenwald  Co.,  on  their  note  at  60  days  bearing  5%  interest,  120  reams  Weston's  Led- 
ger paper  at  $12  per  ream. 

Receive  from  A.  S.  Abell  Co.,  check  for  balance  of  bill  of  the  17  instant,  less  2%  discount. 
Buy  of  Smith,  Dixon  &  Co.,  bill  of  paper  amounting  to  $2,361.82,  2/10  N/30. 
Cash  sales,  $39.62. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      125 

26. 

Pay  cash  for  stationery  for  use  in  office,  $3.20. 
Sell  J.  E.  Hurst  &  Co.,  12,500  lbs.  Jute  Manilla  at  3^. 

A.  S.  Abell  Co.  prepay  their  note  of  the  17th  instant,  $300  less  discount  to  maturity.     (23  days' 
interest.) 

Pay  salaries  as  follows:  Bookkeeper,  $12,  Stenographer,  $8,  Driver,  $10,  Office  Boy,  $3. 

28. 

Receive  of  Geo.  Murphy,  check  in  full  of  bill  of  the  18th  instant,  less  2%. 

Sell  Pearre  E.  Crowl  Co.,  4,250  lbs.  Colored  Flats  at  4^. 

Receive  cash,  of  J.  T.  Clark  in  full  of  bill  of  the  18th  instant,  less  2%  discount. 

Pay  freight  bill  on  invoice  received  25th  instant,  $52.80. 

Buy  two  new  bridles  for  use  on  team,  $8.75. 

Cash  sales,  $240.32. 

29. 

Buy  of  Parsons  Paper  Co.,  invoice  of  paper  amounting  to  $1,426.53,  2/10  N/30. 
Sell  to  World  Publishing  Co.,  4,000  reams  Butchers'  Straw  at  40^  per  ream. 
Sell  to  W.  W.  Trout  &  Co.,  15,000  lbs.  Gray  Manilla  at  $1.50  per  cwt. 
Receive  from  Friedenwald  Co.,  check  for  invoice  of  19th,  less  2%. 

Sell  Pearre  E.  Crowl  Co.,  1,000  lbs.  Letter-heads  at  11^,  receiving  his  note  at  60  days  for  half 
the  amount,  balance  on  account.  * 

Pay  $2  for  stamps. 
Cash  sales,  $260. 

30. 

Receive  from  Geo.  Murphy,  on  account,  $475. 

Buy  of  National  Paper  Co.,  bill  amounting  to  $1,875.65,  giving  our  note  at  60  days  in 
payment. 

Sell  J.  F.  Clark,  75  reams  Weston's  Ledger  at  $12  per  ream. 

Sell  A.  S.  Abell  Co.,  1,625  lbs.  Jute  Manilla  at  6£ 
•       Sell  Williams  &  Wilkins  Co.,  2,075  lbs.  Tagboard  at  3£ 

Cash  sales,  $128.32. 

31. 

Sell  to  J.  E.  Hurst  &  Co.,  794  lbs.  Colored  Flats  at  7e\ 

Receive  of  Pearre  E.  Crowl  Co.,  check  in  payment  of  his  bill  of  the  21st  instant,  less  2% 
discount. 

Pay  salaries:  Bookkeeper,  $12,  Stenographer,  $8,  Driver,  $10,  Office  Boy,  $3,  also  pay  laborers 
in  warehouse,  $200. 

Cash  sales,  $34.80. 

123.     Take  a  Trial  Balance,  then  make  out  a  Six  Column  Statement  and  present  it  to  the 
teacher,  using  the  following  inventories: 

Stock  of  paper $6,310 .38 

Office  desk 55.00 

Books,  stationery,  etc 25 .  00 

Partition  in  office 240 .00 

Two  horses 175 .00 

Wagon 100.00 

Harness 40 .00 


126       MODERN  BOOKKEEPING,  ACCOUNTING  AND   BUSINESS  PRACTICE. 

Stamps 1 .30 

Unexpired  insurance 23 .  00 

4  office  chairs 8 .  00 

Linoleum  on  floor 15 .  00 

Letter  press  and  copying  books 20 .00 

Typewriter  and  desk 145 .00 

Two  store  trucks 9 .  00 

Unexpired  membership  in  International   Cred- 
itors' Association 44 .  00 

124.     After  the  Six  Column  Statement  has  been  finished,  if  it  is  approved,  use  it  as  a  guide  in 

closing  the  Ledger.    When  you  have  closed  the  Ledger,  present  all  the  books  at  the  teacher's 

desk  for  approval. 

WRITTEN  TEST  NO.   10. 

1.  W^hat  is  a  draft?     When  and  why  is  a  draft  used? 

2.  Give  the  form  and  wording  of  a  three-party  time  draft;  a  three-party  sight  draft;  a  two- 
party  sight  draft. 

3.  Who  are  the  original  parties  to  a  draft? 

4.  Could  there  be  subsequent  parties?    Explain. 

5.  Three-party  drafts  serve  a  double  purpose;  two-party  a  single  purpose.     Explain. 

6.  With  reference  to  time  in  how  many  ways  are  drafts  drawn?    Draw  the  forms. 

7.  What  are  sight  drafts  presented  for?    To  whom  are  they  presented?    By  whom? 

8.  Time  drafts  are  presented  twice.     Why? 

9.  What  do  you  mean  by  acceptance?     When  is  it  necessary  to  date  the  acceptance  and 
when  not?    Accept  the  drafts  drawn  by  you  to  illustrate  question  #6  to  show  what  you  mean. 

10.  Where  is  a  draft  usually  payable? 

11.  Where  may  it  be  made  payable? 

12.  Give  drawer's  entry  for  a  three-party  sight  draft;  for  a  three-party  time  draft;  for  a 
three-party  sight  draft  returned  unpaid;  for  a  three-party  time  draft  dishonored  which  he  pays; 
his  entry  for  a  two-party  sight  draft. 

13.  Give  the  drawee's  entry  for  a  three-party  time  draft  when  accepted;  two-party  sight 
draft  when  paid;  three-party  sight  draft  when  paid;  both  time  and  sight  drafts  when  dishonored 
upon  presentation. 

14.  Give  the  payee's  entry  for  a  three-party  time  draft  when  accepted;  when  paid;  sight 
draft  when  paid;  both  time  and  sight  drafts  when  returned  dishonored;  time  draft  dishonored 
at  maturity  after  having  been  accepted  when  presented  for  acceptance;  also,  when  taken  up  (paid) 
by  the  drawer. 

15.  After  a  draft  has  been  paid  who  holds  it?     After  it  has  been  accepted  who  holds  it? 

16.  Why  do  so  many  business  men  object  to  having  drafts  drawn  upon  them? 

17.  To  which  party  is  a  three-party  draft  sent?  Why?  How  about  a  two-party  draft? 
Why? 

18.  Should  the  drawer  notify  the  drawee  that  he  has  been  drawn  on?     Why? 

19.  What  account  is  credited  with  our  acceptances;  debited  wish  acceptances  in  cur  favor? 

20.  How  is  paper  collected  for  us  by  a  bank  when  the  drawee  or  maker  lives  in  another  city? 

21.  Failing  to  post  an  entry  for  $175.38  to  an  account  throws  your  Trial  Balance  out  how 
much?    How  would  you  look  for  and  locate  an  error  of  this  s  ort? 


MODERN  BOOKKEEPING,  ACCOUNTING   AND  BUSINESS  PRACTICE.      127 

THE  SALES  BOOK. 

125.  When  a  Sales  Book  is  kept,  all  sales  on  account  are  entered  in  the  Sales  Book  instead 
of  being  entered  in  the  Journal.  A  proper  Sales  Book  entry  consists  of  the  name  and  address  of 
the  person  to  whom  the  goods  are  sold,  the  terms  of  the  sale  and  an  enumeration  or  description  of 
the  items  sold,  together  with  the  prices  and  the  amount  of  the  bill.  The  name,  the  address  and 
the  terms  may  all  be  written  on  the  first  line  under  the  date  of  the  transaction,  or  the  name  and 
the  terms  may  be  written  on  the  first  line  under  the  date  and  the  address  on  the  second  line.  The 
above  information  is  followed  by  items  which  should  be  begun  about  half  an  inch  further  to  the 
right  than  the  name,  to  avoid  confusion  and  possible  omissions  in  posting.  The  first  money 
column  in  the  Sales  Book  is  an  item  column  and  the  second  money  column  is  the  total  column.  If 
there  is  only  one  item  in  the  sale,  it  appears  in  the  total  column  only.  If  there  are  two  or  more 
items  the  items  appear  in  the  item  column  and  the  total  of  the  sale  appears  in  the  total  column. 
A  common  form  of  Sales  Book,  with  entries  appropriately  arranged,  is  shown  on  page  128. 

126.  Two  of  the  chief  objects  in  keeping  a  Sales  Book,  instead  of  entering  the  Sales  on  ac- 
count in  the  Journal,  are, — first,  to  have  a  record  of  the  Sales  on  account  separate  from  the  other 
transactions  of  the  business,  and,  second,  to  save  work  in  posting. 

In  posting  from  the  Sales  Book  to  the  Ledger,  the  total  amount  of  each  sale  is  posted  direct 
to  the  debit  side  of  the  account  of  the  person  to  whom  the  sale  is  made,  with  the  date  of  the  trans- 
action, the  explanation  "Mdse."  and  a  notation  of  the  terms  if  they  differ  in  any  respect  from  the 
usual  terms  on  which  sales  are  made,  and  the  proper  folio  number.  This  posting  of  the  debits 
from  the  Sales  Book  should  be  done  daily  and  of  course  the  proper  Ledger  folio  should  be  entered 
in  the  Sales  Book  as  each  sale  is  posted.  The  credits  to  the  Merchandise  account  are  not  posted 
separately  for  each  sale  but  are  totaled  and  carried  forward  from  page  to  page  until  the  end  of 
the  month  and  then  one  credit  to  the  Merchandise  account  or  to  the  Merchandise  Sales  account, 
if  such  an  account  is  kept,  is  made,  with  the  last  date  of  the  period  for  which  the  posting  is  done  and 
the  explanation  "  Sales  for  (name  of  the  month)  and  the  Sales  Book  folio."  You  will  note  that  this 
saves  half  of  the  posting  so  far  as  sales  on  account  are  concerned.  The  decrease  in  the  number  of 
postings  decreases  correspondingly  the  likelihood  of  errors  and  increases  proportionately  the  volume 
of  business  that  can  be  entered  or  recorded  by  the  bookkeeper. 

127.  In  large  businesses  often  two  or  more  Sales  Books  are  kept  at  the  same  time.  For 
instance,  two  Sales  Books  may  be  kept  so  that  while  entries  are  being  made  in  one  of  the  Sales 
Books,  the  bookkeeper  may  have  the  other  from  which  to  post.  In  such  a  case,  the  Sales  Books 
would  be  used  in  rotation,  probably  on  alternate  days,  or  a  number  of  Sales  Books  may  ba  kept, 
one  for  each  of  the  several  Departments  in  a  business.  Very  frequently  the  entries  in  the  Sales 
Book  instead  of  being  made  just  at  the  time  of  the  sales,  are  made  from  Sales  Sheets  or  Order  Forms 
which  the  salesman  makes  out  at  the  time  of  the  sale,  and  which  are  turned  in  to  the  Accounting 
Department  as  vouchers  for  the  bookkeeping  records.  The  Sales  Sheets  or  Order  Forms  are  usually 
made  out  in  triplicate.  The  original  is  given  to  the  Shipping  Department  from  which  to  make 
shipment  or  fill  the  order.  The  duplicate  is  given  to  the  Accounting  Department  from  which  to 
do  the  bookkeeping  and  billing,  and  the  triplicate  is  given  to  the  customer  as  a  memorandum 
of  his  order. 

THE  INVOICE  BOOK. 

128.  The  Invoice  Book  is  similar  to  the  Sales  Book  except  that  it  contains  a  record  of  pur- 
chases on  account  instead  of  a  record  of  sales  on  account.  It  is  kept  with  the  same  objects  in 
view,  namely,  first,  to  have  a  record  of  all  purchases  on  account  separate  from  the  other  trans- 
actions of  the  business,  and  second,  to  save  work  in  posting. ' 

Invoice  Books  are  of  several  different  forms.  An  illustration  of  a  desirable  form  with  entries 
appropriately  arranged,  is  shown  on  page  129.  In  this  form  you  will  note  that  the  only  information 
contained  in  the  Invoice  Book  is  the  date  of  the  invoice  the  name  and  address  of  the  person  from 


128 


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130       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

whom  the  purchase  is  made,  and  the  terms  and  the  amount  of  the  invoice.  This  form  of  invoice 
book  presupposes  an  invoice  file  in  which  all  invoices  are  preserved,  filed  either  according  to  date, 
numerically,  or  alphabetically,  so  that  they  can  be  easily  referred  to  if  additional  information  about 
any  invoice  is  wanted  at  any  time. 

In  posting  from  the  Invoice  Book  to  the  Ledger,  the  total  amount  of  each  purchase  is  posted 
direct  to  the  credit  side  of  the  account  of  the  person  from  whom  the  purchase  is  made,  with  the 
date  of  the  invoice,  the  explanation  "Mdse."  and  the  notation  of  the  terms  on  which  the  purchase 
is  made  and  the  proper  Invoice  Book  folio  number.  This  posting  of  the  credits  from  the  Invoice 
Book  should  be  done  daily  and  of  course  the  appropriate  Ledger  folio  should  be  entered  in  the 
Invoice  Book  as  each  purchase  is  posted.  The  debits  to  the  Merchandise  account  or  to  the  Mer- 
chandise Purchases  account,  if  such  an  account  is  kept,  are  not  posted  separately  for  each  pur- 
chase, but  are  totaled  and  carried  forward  from  page  to  page  in  the  Invoice  Book  until  the 
end  of  the  month  and  then  one  debit  to  the  Merchandise  account  or  to  the  Merchandise  Pur- 
chases account  if  such  an  account  is  kept,  is  made,  with  the  last  date  of  the  period  for  which 
the  posting  is  done,  and  the  explanation  "Purchases  for  (the  name  of  the  month)"  and  the  Invoice 
Book  folio.  You  will  note  that  this  saves  half  of  the  posting  so  far  as  purchases  on  account  are 
concerned. 

129.  An  Invoice  Book  might  be  written  up  in  full  like  a  Sales  Book,  and  because  of  the  sav- 
ing in  posting,  still  be  a  distinct  gain  over  the  entering  of  all  purchases  on  account  in  the  Journal, 
but  this  would  be  unnecessary  work,  since  it  is  so  easy  to  preserve  the  invoices  themselves  for 
reference  and  additional  work  is  always  to  be  avoided,  unless  some  definite  advantage  is  gained 
by  doing  it,  because  additional  work,  to  that  extent,  limits  the  capacity  of  the  bookkeeper  to 
handle  a  large  volume  of  business. 

130.  Another  form  of  Invoice  Book  in  quite  general  use,  is  a  blank  book  with  money  columns 
at  the  right  hand  side  of  the  page,  similar  to  the  ruling  of  an  ordinary  Journal,  made  up  like  a  scrap 
book  so  that  the  invoices  as  received  can  simply  be  pasted  into  the  book  and  the  total  of  each  pur- 
chase extended  into  the  money  column,  so  as  to  be  totaled  and  carried  forward  from  page  to  page 
until  the  end  of  the  month  and  then  posted  to  the  debit  s  de  of  the  Merchandise  account  or  of 
the  Merchandise  Purchases  account,  the  same  as  in  the  case  of  the  Invoice  Book  previously  de- 
scribed. With  this  form  of  Invoice  Book,  of  course  each  purchase  would  be  posted  direct  from 
the  invoice  to  the  credit  side  of  the  account  of  the  person  from  whom  the  purchase  is  made. 

131.  In  pasting  invoices  in  an  Invoice  Book  of  this  kind,  paste  the  first  invoice  at  the  top  of 
the  page  by  using  a  little  paste  or  mucilage  on  each  of  the  four  corners  of  the  invoice.  Be  careful 
that  the  right-hand  edge  of  the  invoice  reaches  just  to  where  the  money  column  in  the  Invoice 
Book  begins.  In  pasting  the  second  invoice  on  the  page,  put  the  paste  or  mucilage  on  the  lower 
corners  only  and  lay  the  invoice  so  that  the  top  of  it  will  come  just  below  the  name  and  address 
and  terms  on  the  first  invoice.  The  third  invoice  is  pasted  in  just  the  same  way  as  the  second,  by 
the  bottom  corners  only,  and  is  laid  so  that  the  name  and  address  and  terms  of  the  second  invoice 
show,  and  so  on  down  the  page  until  the  page  is  full.  Then  begin  the  next  page  just  as  this  one  was 
begun.  You  will  note  that  if  the  invoices  are  pasted  in  the  manner  directed,  you  can  read  all  of 
any  invoice  by  simply  holding  up  the  tops  of  any  invoices  which  cover  the  invoice  you  desire 
to  consult.  The  invoice  to  which  you  desire  to  refer  will  be  found  easily  because  the  invoices  are 
arranged  in  the  book  approximately  in  the  order  of  their  dates  and  in  every  case  the  name  of  the 
person  from  whom  the  purchase  is  made  is  exposed  to  view. 

132.  Sales  Books  similar  to  the  form  of  Invoice  Book  just  described  are  in  use  to  a  consider- 
ble  extent.  Sales  Books  of  this  kind  are  made  up  by  pasting  the  carbon  copies  of  bills  that  are 
made  out  for  sales  on  account,  in  a  blank  Sales  Book  with  a  money  column  at  the  right-hand  side 
of  the  page.  The  pasting,  totaling  and  posting  of  such  a  Sales  Book  is  similar  to  the  same  work 
in  the  Invoice  Book  just  described. 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE       131 

133.  Many  firms  now  use  Billing  Machines  and  Bookkeeping  Machines  of  various  makes 
by  which,  through  the  use  of  carbon  paper,  the  Sales  Book  entry  is  made  at  the  same  time  that 
the  bill  is  written. 

The  bookkeeper  who  understands  the  principles  explained  herein,  can  readily  adapt  himself 
to  any  method  that  may  be  in  use  by  the  firm  with  which  he  finds  employment. 

THE  PETTY  CASH  BOOK. 

134.  In  most  businesses  there  are  a  number  of  small  items  of  expense  paid  from  day  to  day 
that  the  bookkeeper  prefers  not  to  enter  and  post  separately  and  that  the  proprietor  is  satisfied  to 
have  entered  at  regular  intervals  in  a  lump  sum.  Such  items,  for  instance,  as  "  Newspaper  for 
the  month,  26^,"  "Carfare  for  clerk  sent  on  an  errand,  10^,'.'  "Telegram,  25^,"  "Removing  Rub- 
bish, 50cy  etc.  Small  items  of  this  kind  of  infrequent  or  irregular  occurrence  are  often  handled 
through  a  Petty  Cash  Book  or  Petty  Cash  Account.  To  do  this,  the  regular  Cash  account  is 
credited  with,  say  Ten  Dollars,  and  a  Petty  Cash  Fund  account  is  opened  and  is  debited  with  the 
same  amount,  and  that  sum  of  money  is  taken  from  the  regular  cash  drawer  and  put  in  some  other 
place  where  it  will  be  accessible  as  needed.  Then  whenever  an  expenditure  of  the  class  referred 
to  is  made,  the  money  is  paid  from  this  special  fund  and  the  payment  is  entered  on  the  credit  side 
of  the  Petty  Cash  Book.  The  total  of  payments  made  out  of  the  fund  plus  any  of  the  fund  left 
on  hand  always  equals  the  face  figure  of  the  fund,  say  $10.00  e.g.,  according  to  the  Petty  Cash 
Fund  clerk's  book,  the  payments  for  the  month  up  to  this  date  amount  to  $7.46.  Now,  if  she 
has  $2.54  still  on  hand  her  work  is  correct.  At  the  end  of  the  month,  the  amount  of  these  Petty 
Cash  expenditures  is  counted  up,  classified  according  to  the  different  expense  accounts  in  use  and 
entries  are  made  upon  the  General  Cash  Book  to  cover  the  payments  made.  An  equal  amount 
should  then  he  transferred  from  the  regular  Cash  drawer  to  the  Petty  Cash  drawer,  which  will  of 
course  restore  the  Petty  Cash  Fund  to  its  original  amount.  The  Petty  Cash  account  can  be 
and  probably  should  be  proved  daily  by  whoever  is  in  charge  of  it,  just  like  the  regular  Cash  ac- 
count is  proved  daily,  and  of  course,  the  Petty  Cash  is  not  counted  as  part  of  the  regular  cash  on 
hand  in  the  daily  proving  of  the  regular  Cash  account,  because  an  entry  has  been  made  in  the  Cash 
Book  showing  the  amount  of  the  fund  as  having  been  actually  paid  out,  that  is,  the  regular  Cash 
account  has  been  credited  for  it,  the  credit  to  the  cash  account  having  been  balanced  by  a  debit 
to  Petty  Cash. 

SUBDIVISION  OF  THE  MERCHANDISE  ACCOUNT. 

135.  In  many  large  businesses,  it  is  considered  desirable  to  know  from  month  to  month  and 
from  year  to  year  exactly  what  the  total  cost  of  the  Merchandise  Purchased  has  been  for  any 
given  period  and  exactly  what  the  net  return  from  the  sale  of  Merchandise  has  been  for  the  same 
period.  This  is  accomplished  by  keeping  on  the  one  hand  a  "Merchandise  Purchases"  account 
with  a  number  of  subsidiary  accounts  such  as  "Cash  Discounts  on  Purchases,"  "Purchases  Re- 
turned" and  "Freight  Inward"  and  on  the  other  hand  a  "Merchandise  Sales"  account  with  sub- 
sidiary accounts  such  as  "Cash  Discounts  on  Sales,"  "Sales  Returned"  and  "Freight  Outward." 

136.  If  the  Merchandise  account  is  subdivided  in  the  manner  above  mentioned,  at  the  be- 
ginning of  a  business  or  after  the  books  have  been  closed,  the  Merchandise  account  stands  debited 
with  the  amount  of  Merchandise  on  hand  as  per  inventory  and  no  further  entries  are  made  to  the 
Merchandise  account  until  it  is  desired  to  close  the  books.  At  the  time  of  closing,  the  Merchan- 
dise account  is  debited  through  a  Journal  entry  with  the  net  cost  of  all  goods  purchased  as  shown 
in  the  Merchandise  Purchases  account  and,  through  another  Journal  entry,  is  credited  with  the 
net  proceeds  from  all  goods  sold  as  shown  in  the  Merchandise  Sales  account,  after  which  the  Mer- 
chandise account  may  be  closed  just  as  though  there  had  been  only  the  one  Merchandise  account. 


132       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

137.  With  the  subdivision  mentioned,  Merchandise  Purchases  is  debited  for  the  face  of  the 
bill  whenever  Merchandise  is  purchased.  If  the  purchase  is  on  account,  the  person  from  whom 
the  purchase  is  made  is  credited  for  the  same  amount.  If  the  purchase  is  for  cash,  cash  is  credited 
for  the  same  amount.  If  there  is  a  discount  on  the  purchase  for  prompt  payment  and  the  bill 
is  paid  within  the  required  time  and  the  discount  secured,  the  debit  for  the  face  of  the  bill  to  the 
account  of  the  person  from  whom  the  purchase  is  made,  is  balanced  by  two  credits,  one  to  the 
cash  account  for  the  amount  of  cash  actually  paid  and  one  to  the  Cash  Discount  on  Purchases 
account  for  the  amount  of  the  discount  secured. 

138.  If  goods  which  have  been  purchased  are  for  any  reason  whatever  returned  to  the  person 
from  whom  they  were  purchased,  the  person  from  whom  they  were  purchased  is  debited  and  the 
Purchases  Returned  account  is  credited. 

139.  Whatever  freight  and  drayage  is  paid  on  goods  that  have  been  purchased  is  debited 
to  the  Freight  Inward  account,  Cash,  or  an  account  with  the  Railroad  or  Drayman,  if  such  an 
account  is  kept,  being  credited. 

140.  At  a  time  when  the  books  are  to  be  closed,  the  accounts  with  Cash  Discounts  on  Pur- 
chases, Purchases  Returned,  and  Freight  Inward,  are  closed  through  Journal  entries  into  the  Mer- 
chandise Purchases  account  before  that  account  is  closed  into  the  Merchandise  account.  The 
Journal  entries  would  be  as  follows:  Cash  Discounts  on  Purchases,  debtor,  to  Merchandise  Pur- 
chases, creditor,  (the  Discounts  on  the  Purchases  decrease  the  net  cost  of  the  purchases) .  Pur- 
chases Returned,  debtor,  to  Merchandise  Purchases,  creditor  (The  Purchases  Returned  decrease 
the  net  cost  of  the  Merchandise).  Freight  Inward  creditor,  to  Merchandise  Purchases,  debtor 
(the  freight  and  drayage  paid  on  the  Merchandise  Purchased  increase  the  actual  cost  of  the 
Merchandise) . 

141.  The  treatment  of  the  Merchandise  Sales  account  corresponds  with  the  treatment  of 
the  Merchandise  Purchases  account. 

142.  Merchandise  Sales  is  credited  for  the  face  of  the  bill  whenever  Merchandise  is  sold. 
If  the  sale  is  on  account,  the  person  to  whom  the  sale  is  made  is  debited  for  the  same  amount.  If 
there  is  a  discount  on  the  sale  for  prompt  payment  of  the  bill  and  the  customer  avails  himself  of 
the  discount  the  credit  for  the  face  of  the  sale  to  the  account  of  the  customer  is  balanced  by  two 
debits,  one  to  the  Cash  account  for  the  amount  of  Cash  received  and  the  other  to  the  Cash  Dis- 
count on  Sales  account  for  the  amount  of  the  discount  allowed. 

143.  If  goods  that  have  been  sold  are  for  any  reason  whatever  returned  to  us,  the  Sales 
Returned  account  is  debited  and  the  account  of  the  person  who  returned  the  goods  is  credited. 

144.  If  we  pay  any  freight  or  drayage  on  goods  that  we  have  sold  as  when  we  sell  goods 
F.  O.  B.  our  own  city  (drayage)  or  F.  0.  B.  any  other  city,  (drayage  and  freight)  Freight  Outward 
is  debited  and  cash  or  our  account  with  the  drayman  or  the  railroad,  according  to  the  facts  in 
the  case,  is  credited. 

At  a  time  when  the  books  are  to  be  closed,  the  accounts  with  Cash  Discounts  on  Sales,  Sales 
Returned,  and  Freight  Outward  are  closed  through  Journal  entries  into  the  Merchandise  Sales 
account  before  that  account  is  closed  into  the  Merchandise  account.  The  Journal  entries  would 
be  as  follows:  Cash  Discounts  on  Sales,  creditor,  to  Merchandise  Sales,  debtor.  (The  discounts 
on  the  sales  decrease  the  net  returns  from  the  sales.)  Sales  Returned,  creditor,  to  Merchandise 
Sales,  debtor.  (The  sales  returned  to  us  decrease  the  net  returns  from  the  sales.)  Freight  Out- 
ward, creditor,  to  Merchandise  Sales,  debtor.  (The  freight  and  drayage  paid  on  goods  sold 
decrease  the  net  returns  from  the  sales.) 

145.  After  the  Subsidiary  accounts  have  been  properly  closed  into  the  Merchandise  Pur- 
chases account  and  the  Merchandise  Sales  account,  respectively,  those  accounts  are  closed  into 
the  Merchandise  account  as  above  noted. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      133 

PARTNERSHIP. 

146.  When  two  or  more  persons  engage  in  a  business  together  each  contributing  capital  or 
services  or  both,  and  agreeing  to  share  the  profits  (and  usually  the  losses)  a  partnership  is  formed 
and  the  members  of  the  firm  are  known  as  partners.  The  joint  ownership  of  a  business  consti- 
tutes a  partnership. 

147.  Partners.  Partners  are  of  several  kinds.  General  or  ostensible  partners  are  those  who 
are  openly  known  as  partners.  Their  liability  for  the  debts  of  the  partnership  is  unlimited.  Dor- 
mant or  secret  partners  are  those  whose  connection  with  the  firm  is  kept  secret.  If  their  connec- 
tion with  the  firm  is  not  discovered,  they  escape  liability  for  the  firm's  indebtedness,  but  if  their 
connection  is  discovered,  they  are  individually  liable  for  all  of  the  firm's  obligations,  just  the  same 
as  general  partners.  Special  partners  are  those  whose  interests  or  liabilities  or  both  are  especially 
provided  for  in  the  partnership  agreement  and  if  the  partnership  agreement  has  been  properly 
drawn  and  due  notice  has  been  given  the  public  in  accordance  with  the  law  on  the  subject,  the 
liability  of  a  special  partner  is  limited  in  accordance  with  the  partnership  agreement,  usually  to 
the  amount  of  his  investment.  Nominal  partners  are  persons  who  permit  the  impression  to  pre- 
vail that  they  are  partners  in  a  business,  when  in  reality  they  are  not  partners.  Nominal  part- 
ners are  personally  liable  to  the  creditors  of  the  firm  if  credit  has  been  granted  the  firm  because 
of  the  impression  given  the  creditor  that  the  nominal  partner  was  a  real  partner. 

148.  Partnerships  Dangerous.  Partnerships  should  be  entered  into  only  with  persons  with 
whom  you  are  well  acquainted  and  in  whom  you  have  the  fullest  confidence  because  the  act  of  one 
partner  binds  all  of  the  other  members  of  the  partnership  and  the  acts  of  a  partner  who  is  head- 
strong or  lacking  in  judgment  may  cause  the  firm  to  transact  business  at  a  loss  instead  of  at  a 
profit,  and,  further,  as  all  of  the  private  property  of  each  partner  is  liable  for  all  of  the  firm's  debts, 
by  entering  into  a  partnership  you  may  lose  not  only  what  you  invest  in  the  business,  but  every- 
thing else  that  you  have  besides. 

149.  Forming  a  partnership.  When  a  partnership  is  formed,  a  partnership  agreement  should 
be  drawn  up,  stating  clearly: — 

First, — The  names  of  the  persons  entering  into  the  partnership. 

Second, — The  purpose  and  duration  of  the  partnership. 
.   Third, — The  investment  made  by  each  of  the  partners  with  an  agreement  as  to  the  interest  to 
be  allowed,  if  any,  and  a  further  agreement  as  to  withdrawals  or  additional  investments. 

Fourth, — The  time  to  be  devoted  to  the  business  by  each  partner,  if  any. 

Fifth, — How  the  profits  or  losses  are  to  be  apportioned  between  or  among  the  partners. 

Sixth, — The  agreement  of  each  partner  to  refrain  during  the  continuation  of  the  partnership 
from  assuming  any  liability  by  endorsing  notes,  etc.  or  by  becoming  surety  for  any  person  or  per- 
sons whomsoever  without  the  written  consent  of  the  other  partner  or  partners,  and,  if  desired,  a 
similar  agreement  binding  each  partner  to  refrain  from  engaging  in  any  other  business  during  the 
duration  of  the  partnership. 

Seventh, — An  agreement  that  proper  records  or  books  of  account  shall  be  kept  which  shall  at 
all  times  be  accessible  to  each  or  every  partner. 

Eighth, — Provision  for  the  winding  up  of  the  business  at  the  close  of  the  period  for  which  the 
partnership  is  formed  or  at  any  earlier  termination  of  the  partnership. 

150.  It  is  so  difficult  to  make  an  agreement  express  exactly  what  you  desire  and  all  that  you 
desire,  that  when  you  wish  to  enter  into  a  partnership  agreement,  after  writing  out  as  clearly  as 
you  can,  articles  of  co-partnership  acceptable  to  all  partners,  you  had  better  submit  the  proposed 
articles  to  a  good  lawyer  and  permit  him  to  pass  upon  them  and  to  change  the  wording  and 
sentence  structure  wherever  he  deems  it  necessary  in  order  to  fully  cover  the  points  intended,  and, 
further,  to  insert  provisions  to  cover  any  of  the  possible  happenings  which  you  have  overlooked. 

151.  Partnership  agreements  are,  of  course,  drawn  so  that  each  partner  can  have  a  copy  of 
the  agreement, — say,  in  duplicate,  triplicate,  etc.    as  may  be  required. 


134       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

LEASES. 

152.  In  business,  properties  that  are  not  owned  by  the  proprietors  of  a  business  are  usually 
occupied  under  a  lease.  The  forms  of  lease  used  differ  in  different  cities  and  states.  No  business 
man  should  ever  sign  any  paper  without  reading  and  understanding  its  contents.  A  lease  is  not 
an  exception  to  this  rule.  Sometimes  landlords  are  sufficiently  anxious  to  rent  their  properties 
to  make  some  concessions  in  the  terms  of  the  lease  in  order  to  secure  a  tenant  and  very  frequently 
they  will  make  improvements  to  a  property  in  order  to  -secure  a  responsible  tenant  especially 
under  a  lease  for  a  term  of  years.  It  is  much  easier  to  get  such  improvements  as  you  desire  by 
conditioning  your  taking  the  property  upon  the  improvements  being  made,  than  by  simply  asking 
for  the  improvements  after  the  lease  has  been  signed.  In  the  latter  case  you  are  likely  to  be 
told  that  the  improvements  you  desire  are  unnecessary  but  that  you  may  make  them  at  your  own 
expense  if  you  choose  to  do  so,  provided  you  will  restore  the  property  to  its  original  condition  at 
the  termination  of  your  tenancy. 

FIRE  INSURANCE. 

153.  Every  prudent  business  man  carries  Fire  Insurance  covering  approximately  the  value 
of  such  of  the  assets  of  his  business  as  would  be  likely  to  be  destroyed  in  the  event  of  a  fire.  The 
probabilities  of  a  business  being  burned  out  are  not  great  and  the  cost  of  the  fire  insurance  is  pro- 
portionately small.  The  greater  the  probability  of  a  fire,  the  higher  the  insurance  premium  rates. 
But  regardless  of  what  the  premium  rates  are  you  must  carry  fire  insurance,  otherwise  you  will 
probably  be  considered  imprudent  and  your  credit  will  be  injured  to  a  considerable  extent  and  in 
the  event  of  a  fire  you  may  lose  everything  you  own,  and  more,  too,  if  your  store  or  business  con- 
tains some  things  bought  on  credit.  This  would  force  some  men  into  bankruptcy  and  would  force 
some  honest  men  even  if  they  did  go  through  bankruptcy,  into  a  long,  hard  struggle  to  pay  for 
"a  dead  horse." 

In  paying  your  Fire  Insurance  premiums  you  may  feel  that  you  are  contributing  toward  the 
losses  of  those  who  have  been  so  unfortunate  as  to  be  burned  out  and  that  all  of  the  members  of 
the  benevolent  Fire  Insurance  Association  (the  policy  holders)  will  contribute  with  equal  willing- 
ness to  make  good  your  loss  if  you  should  ever  meet  with    similar  misfortune. 

154.  In  taking  out  fire  insurance,  be  sure  that  the  description  of  the  property  insured  is 
worded  in  such  a  way  as  to  cover  every  thing  of  value  that  you  may  have  on  the  premises.  The 
description  in  the  writer's  insurance  policies  starts  "On  furniture  and  fixtures  of  every  descrip- 
tion, useful  and  ornamental"  and  after  enumerating  everything  that  could  be  named  from  the 
inventory,  ends  with  "and  all  inside  and  outside  improvements  made  by  the  insured  and  situate 
Northwest  Corner  8th  &  Chestnut  Sts.,  Phila.,  Pa."  When  the  writer's  place  of  business  was 
destroyed  in  the  great  Baltimore  fire  in  the  year  1904,  there  was  nothing  in  his  place  of  business 
that  was  not  covered  by  his  insurance  policies.  Wording  similar  to  the  above  was  even  held  and 
allowed  by  the  Insurance  Companies  to  cover  the  wall  paper  on  the  walls  that  had  been  put  on  by 
the  tenant  at  his  own  expense.  In  paying  insurance,  you  may  as  well  have  the  insurance  cover 
everything  that  you  have  on  the  premises  and  it  will  not  do  this  unless  care  is  taken  in  the  de- 
scription of  what  is  insured.  It  is  a  very  common  thing  for  the  Insurance  Companies,  in  the  event 
of  a  loss,  to  be  able  to  pick  out  several  hundred  dollars'  worth  of  the  things  lost  and  say  "this  was 
not  covered  by  the  policy."  Do  not  permit  this  to  happen  in  your  case,  if  you  should  ever  sustain 
a  loss. 

155.  If  you  should  move,  be  sure  to  have  the  Insurance  Companies  in  which  your  goods  are 
insured,  transfer  your  insurance  to  the  new  address  on  the  day  that  you  move,  otherwise  you  will 
be  without  insurance  at  the  new  address  until  the  transfer  has  been  made  by  the  Insurance 
Companies. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      135 

156.  If  you  should  buy  a  business  or  a  property,  be  sure  that  the  Insurance  Companies  trans- 
fer the  insurance  to  you  on  the  day  that  you  become  the  owner  of  the  business  or  the  property, 
since  otherwise  you  will  be  without  insurance  until  the  proper  transfer  has  been  made  by  the 
Insurance  Companies. 

157.  It  is  well  to  keep  an  inventory  of  whatever  is  covered  by  the  Insurance,  in  the  safe, 
where  it  cannot  be  destroyed,  or  better  still,  at  some  place  away  from  the  building  in  which  the 
property  covered  by  the  insurance  is  located,  so  as  to  be  able  to  give  accurate  information  as  to 
just  what  loss  you  have  sustained  in  the  event  of  a  fire.  You  will  not  be  paid  for  the  things  lost  in 
the  fire  that  you  forget  and  are  unable  to  list  or  to  enumerate.  This  being  the  case,  an  inventory 
from  which  to  make  up  your  "Statement  of  Loss"  is  the  only  practical  and  business-like  plan. 

158.  When  you  take  out  fire  insurance,  your  insurance  broker  will  probably  divide  the  in- 
surance among  a  number  of  companies.  If  you  carry  $10,000  fire  insurance  you  will  probably 
receive  four  policies  of  $2500  each  or  five  policies  of  $2,000  each,  each  policy  from  a  different  in- 
surance company.  This  is  a  good  plan  for  all  concerned.  In  the  event  of  a  loss,  the  loss  is  divided 
among  a  number  of  companies  and  if  by  any  chance,  as  happens  occasionally,  some  fire  insurance 
company  should  fail  at  a  time  when  you  have  a  claim,  since  your  insurance  is  divided,  the  failure 
of  one  company  can  affect  only  a  part  of  your  insurance. 

SET  3. 

WHOLESALE    HARDWARE    BUSINESS    OF &    CO. 

Student's  name 

_&  A.  E.  Trader  have  entered  into  partnership  September  1st,  19 — ,  for  the 


Student's  name 

purpose  of  conducting  a  Wholesale  Hardware  Business.     The  gains  and  losses  are  to  be  shared 
pro  rata  according  to  investment  after  paying « a  salary  of  $85  a  month  for  his  ser- 

Student's  name 

vices  in  managing  the  business.     The  name  of  the  firm  is  to  be &  Co.     The  dura- 
student's  name 
tion  of  the  partnership  is  to  be  five  years. 

invests  cash,  $3,235.07;  Mdse.,  as  per  inventory,  $12,600;  Store  and  Office 

Student's  name 

Fixtures,  per  inventory,  $575,  and  the  following  accounts  due  him: — Marshall,  Wescoat  &  Co. 
Columbia,  S.  C,  $308;  J.  A.  Constantine,  Sunbury,  Pa.,  $320.23;  Miller  Hardware  Co.,  Atlanta,  Ga. 
$437.86;  J.  R.  M.  Adams,  524  Girard  Ave.,  $464.12;  Frank  Beall  &  Co.,  Hancock,  Md.,  $214.25 
S.  C.  Pitcher  &  Co.,  Newton,  N.  C,  $123.60;  Cumberland  Hardware  Co.,  Cumberland,  Md. 
$200.50;  George  Keller,  Winchester,  Va.,  $421.27;  Miller  Supply  Co.,  Winchester,  Va.,  $235.36 
J.  F.  Pearson  &  Co.,  Baltimore,  Md.,  $213.14;  Bailey  Bros.  &  Raub,  Lancaster,  Pa.,  $475.36 
Keystone  Hardware  Co.,  Bedford,  Pa.,  $428.65;  Central  Pa.  Supply  Co.,  York,  Pa.,  $126.78 
Wilcox  Hardware  Co.,  Gettysburg,  Pa.,  $105.40;  George  Yakel  Hardware  Co.,  Charleston,  S.  C. 
$408.42;  J.  R.  Emerson  &   Co.,  Frederick,  Md.,  $187.67;  Oscar  Bear,   148  Chew  St.,   $25.70 
Edward  Steiner  &  Co.,  Hagerstown,  Md.,  $85.74;  Union  Hardware  Co.,  Union,  S.  C,  $110.37;  and 
note  of  Dillon  &  Co.  for  $278,  due  60  days  from  August  15th,  with  interest  at  6%.     Accounts  owed 
by  him  as  follows:  National  Tool  &  Stamping  Co.,  Harrisburg,  Pa.,  $200.21;  Maryland  Hinge  Co., 
Baltimore,  Md.,  $15.20;  Frank  B.  Sloan  &  Co.,  421  Arch  St.,  $415.29;  Francis  Albert  &  Co., 
1006  Arch  St.,  $231.20;  Anderson  &  Ireland,  111-115  Light  St.,  $60.70;  Henry  Disston's  Sons, 
Tacony,  Pa.,  $251.14,  and  note  due  William  H.  Cole  &  Son  for  $110.14,  due  60  days  from 
August  3rd  with  interest  at  6%. 

A.  E.  Trader  invests  cash,  $15,000. 

In  this  set  you  may  use  a  Sales  Book,  an  Invoice  Book  and  a  Petty  Cash  Book  as  explained 
in  articles  125  to  134  and  may  subdivide  the  merchandise  account  in  accordance  with  articles  135 
to  145.  Use  the  following  accounts  besides  the  necessary  personal  accounts:  A.  E.  Trader,  Stock;  A. 
E.  Trader,  Private; Stock; Private;  Merchandise;  Cash;  Expense; 

Student's  name  Student's  name 


136       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Bills  Receivable;  Bills  Payable;  Interest;  Advertising;  Store  and  Office  Fixtures;  Freight  and 
Drayage;  Teams;  Insurance;  Salaries;  and  accounts  with  Jas.  Lower,  a  salesman,  whom  we  pay 
$60  per  month  and  expenses;  James  Lower,  Traveling  Expense  account;  George  Evans,  a  book- 
keeper, whom  we  pay  $80  per  month;  John  Sellers,  a  salesman,  whom  we  pay  $75  per  month  and 
expenses;  John  Sellers,  Traveling  Expense;  Robt.  E.  Traverse,  Attorney;  and  an  account  in  the 
Ledger  with  Cash. 

Draw  up  a  partnership  agreement. 

159.  The  advantage  of  keeping  a  Traveling  Expense  account  for  each  salesman  is  that  it 
enables  you  to  tell  the  total  cost  of  selling  the  goods  sold  by  each  salesman.  To  find  this  total 
cost,  the  salesman's  salary  and  his  expenses  must  be  added  together.  The  percentage  that  this  total 
forms  of  the  price  received  for  the  goods  sold  by  the  salesman,  enables  the  firm  to  judge  whether 
or  not  it  is  profitable  to  retain  the  salesman  in  its  employ.  When  money  is  advanced  to  a  sales- 
man for  traveling  expenses,  his  personal  account  may  be  debited  with  the  money  given  him  and 
then  when  he  sends  in  his  itemized  statement  of  expenses,  his  personal  account  can  be  credited  and 
his  expense  account  debited  through  a  proper  Journal  entry  for  the  amount  actually  expended. 
Many  salesmen  sell  on  commission,  receiving  a  certain  percentage  of  the  price  received  for  the 
goods  sold — sometimes  one  percentage  on  one  class  of  goods  and  another  percentage  on  another 
class  of  goods.  Other  salesmen  sell  on  a  salary  and  a  commission,  either  with  or  without  an  al- 
lowance for  expenses.  Accounts  with  salesmen  are  a  very  important  class  of  accounts  and  must 
be  kept  with  great  care  to  avoid  any  injustice  to  either  the  salesmen  or  the  firm. 

160.  In  case  an  employee  is  allowed  to  draw  money  account  his  salary  from  time  to  time,  in- 
stead of  receiving  his  salary  all  in  one  payment  at  the  time  it  becomes  due,  an  account  should  be 
opened  with  him  and  his  account  should  be  debited  and  cash  credited  for  whatever  money  he  draws, 
and  at  the  time  his  salary  becomes  due,  his.account  should  be  credited  and  the  salaries  account 
debited  for  the  full  amount  of  his  salary. 

161.  In  many  sets  of  books,  there  is  an  account  kept  under  the  heading  "Lost  Accounts  and 
Notes"  and  if  such  an  account  is  kept,  at  any  time  when  there  is  a  loss  on  a  personal  account  or  on 
a  note,  a  Journal  entry  is  made  debiting  the  Lost  Accounts  &  Notes  account  and  crediting  the 
personal  account  or  the  Bills  Receivable  account  for  the  amount  of  the  loss,  with  the  proper  ex- 
planation. Then  in  closing  the  books,  the  "Lost  Accounts  and  Notes"  account  is  credited  for 
the  amount  that  its  debit  side  exceeds  its  credit  side,  and  the  Loss  and  Gain  account  is  debited  for 
the  same  amount. 

162.  If  there  is  occasion  to  place  an  account  or  a  note  in  the  hands  of  an  attorney  for  collec- 
tion we  open  an  account  with  the  attorney,  putting  the  word  "Attorney"  after  his  name  and  debit 
this  account  for  any  account  or  note  we  give  him  for  collection,  such  debit  being  offset  by  a  credit 
to  the  account  of  the  person  whose  account  is  thus  turned  over  to  the  attorney  for  collection  or 
to  the  Bills  Receivable  account  if  it  is  a  note  that  is  given  the  attorney  for  collection.  If  the  ac- 
count or  note  is  collected,  the  attorney  is  credited  with  the  full  amount  of  the  claim  and  the  credit 
is  balanced  by  a  debit  to  the  Cash  account  for  the  amount  of  cash  given  us  by  the  attorney,  and  a 
debit  to  the  Expense  account  for  the  amount  of  the  attorney's  percentage  or  fee  for  collecting  the 
claim.  If,  on  the  other  hand,  the  attorney  reports  that  he  is  unable  to  collect  the  amount,  we 
credit  his  acount  and  debit  the  "Lost  Accounts  and  Notes"  account  for  the  face  of  the  claim. 

163.  An  account  with  cash  is  sometimes  kept  in  the  Ledger.  When  this  is  done,  the  Cash 
Account  in  the  Ledger  is  debited  with  the  amount  of  cash  on  hand  at  the  time  the  account  is 
opened,  and  then  at  the  end  of  the  month  or  other  Trial  Balance  period  is  debited  with  the  total 
receipts  and  credited  with  the  total  disbursements  during  the  period.  When  the  total  receipts 
and  disbursements  have  been  posted,  the  debit  balance  of  the  Cash  Account  in  the  Ledger,  is,  of 
course,  the  same  as  the  balance  of  cash  on  hand  as  shown  by  the  General  Cash  Book. 

The  Cash  Account  in  the  Ledger  is  a  "Controlling"  account.  When  the  Cash  Account  in 
the  Ledger  is  debited  for  the  cash  on  hand  at  the  start  or  with  the  total  receipts  at  the  end  of  the 
month  or  other  Trial  Balance  period,  no  other  account  need  be  credited,  because  this  is  not  a  new 
debit  but  is  simply  the  transfer  of  a  debit  from  one  part  of  the  books  to  another  part  of  the  books, 


MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE.      137 

and,  of  course,  only  one  of  the  debits  is  included  in  the  Trial  Balance, — usually  that  from  the  Con- 
trolling Account.  Likewise,  when  the  Cash  Account  in  the  Ledger  is  credited  with  the  total  dis- 
bursements during  the  month  or  other  Trial  Balance  period,  no  other  account  is  debited,  because 
this  is  simply  the  transfer  of  a  credit  from  one  part  of  the  books  to  another  part  of  the  books  and 
only  one  of  the  credits  is  included  in  the  Trial  Balance. 

SEPT.  2. 

Secure  a  five  year  lease  on  the  store  at  508  Market  Street from  Wm.  H.  W. 

Your  City 

Quick  &  Bro.,  Incorporated,  at  $100  a  month  and  pay  the  first  month's  rent.  When  you  have 
the  lease  written  up  your  teacher  will  sign  for  Quick  &  Bro. 

Pay  for  stationery,  $8. 

Pay  for  postage  stamps,  $2. 

Pay  for  desk  and  office  chairs,  $40. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  2  doz.  carpet  sweepers,  at  $17.85  per  doz. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  1,000  lbs.  f  inch  chain  at  $4.32|  per  cwt. 

Sell  to  J.  C.  Bailey,  Woodstock,  Va.,  on  %,  \  doz.  corn  cultivators  at  $134.30  per  doz. 

Buy  from  the  National  Tool  &  Stamping  Co.,  on  %,  1  doz.  Dixon's  Meat  Cutters  No.  3,  $125.60 
per  doz. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  30  Perfect  Oilers  at  $1.50  each,  1  doz.  nail  nippers,  $2.60 
per  doz. 

Buy  from  Francis  Albert  &  Co.,  on  %,  10  doz.  lawn  sprinklers  at  $12  per  doz.,  5  doz.  Easy 
Lawn  Swings,  at  $78  per  doz.,  1  doz.  hedge  trimmers  at  $5.87  per  doz. 

Sell  to  J.  W.  Russell,  3547  Germantown  Ave.,  on  %,  1  gross  Acme  Nut  Crackers  at  $37.45 
per  gross. 

Sell  to  George  Keller,  on  %,  |  doz.  well  pumps,  No.  6,  at  $178.40  per  doz. 

Receive  from  Cumberland  Hardware  Co.,  on  %,  bank  draft  for  $136. 

Pay  sight  draft  drawn  on  us  by  Frank  B.  Sloan  &  Co.,  $175. 

Sell  to  C,  C.  Pursey  &  Co.,  Richmond,  Va.,  on  %,  2  doz.  French  rat  traps  at  $12.50  per  doz. 

Have  your  stock  insured  for  one  year  for  $12,000,  rate  |%;  premium,  $60.  Prepare  a 
description  of  the  property  to  become  a  part  of  the  insurance  policy. 

3. 

Receive  from  George  Keller,  note  for  $250  due  30  days  from  September  2d.  Endorse  this 
note  and  send  it  to  Henry  Disston's  Sons  on  account. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  36  sets  knives  and  forks  at  $3.50  per  set,  1  doz.  Columbia 
No.  2  tack  pullers  $1.75  per  doz. 

Buy  from  Henry  Disston's  Sons,  on  %,  50  doz.  hand  saws  at  $10.20  per  doz. 

Sell  to  Samuel  Emmert,  Concord,  N.  C,  on  %,  10  doz.  Yankee  Rat  Traps,  at  $11  per  doz.,  1 
doz.  sidewalk  scrapers  at  $2.30  per  doz. 

Sell  J.  R.  M.  Adams,  on  %,  4  Regulator  Pumps  at  $21  each,  1  gross  Leader  Scythe  Stones  at 
$4.45  per  gross. 

Sell  to  George  Yakel  &  Co.,  on  %,  4  doz.  screen  doors  at  $12  per  doz.,  1  gross  cupboard  cas- 
ters at  $10.30  per  gross. 

Receive  from  Miller  Hardware  Co.,  on  %,  check  for  $325. 

4. 

Send  Frank  B.  Sloan  &  Co.,  on  %,  our  note  at  30  days  for  $150  with  interest  at  6%. 

Sell  Young  Bros.,  Danville,  Va.,  on  %,  4  deep  well  pumps  at  $15  each,  1  doz.  Criterion  Saw 
Sets  at  $5.47  per  doz. 

Sell  Frank  Beall,  on  %,  1  doz.  Invincible  Post  Hole  Diggers  at  $9  per  doz.,  1  gross  metal  polish 
at  $16  per  gross,  1  doz.  iron  planes  at  $15  per  doz.,  2  doz.  Patent  Pliers  at  $9  per  doz.,  3  doz.  garden 
rakes  at  $5  per  doz.,  1  doz.  razors  at  $17  per  gross,  1  spray  pump,  $10.85,  1  doz.  Lightning  Apple 
Parers,  $10  per  doz. 


138       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  A.  B.  Cochrane  &  Co.,  515  Commerce  St.,  on  %,  2  gross  grooved  lumber  pencils  at  $9  per 
gross,  1  gross  corn  poppers  at  $10.50  per  gross,  2  doz.  hand  saws  at  $15  per  doz.,  3  doz.  rip  saws 
at  $21  per  doz.,  1  gross  cans  metal  polish,  $12.65  per  gross. 

Union  Hardware  Co.  accepted  our  draft  at  30  days  from  Sept.  4th,  for  $175. 

Sell  to  Miller  Supply  Co.,  on  %,  12  doz.  Jones  Reversible  Screw  Drivers,  $12  per  doz.,  1  doz'. 
razors  at  $12.72  per  doz. 

Sell  to  J.  A.  Constantine,  on  %,  6  windmill  pumps  at  $16  each,  1  gross  artists'  pencils  at  $9.44 
per  gross. 

Buy  of  William  H.  Cole  &  Son,  918  Filbert  St.,  12  doz.  Black  Hawk  Nail  Pullers  at  $9  per 
doz.,  12  doz.  ice  shredders  at  $15  per  doz.,  6  doz.  Matchless  Mop  Wringers  at  $12  per  doz.,  1 
gross  nut  crackers  at  $15.35  per  gross. 

Sell  to  Cumberland  Hardware  Co.,  on  %,  12  doz.  Mystic  Lawn  Sprinklers  at  $6  per  doz.,  10 
kegs  horse  shoes  at  $4  per  keg,  12  American  Meat  Cutters  at  $7  each,  10  Pastime  Lawn  Mowers 
at  $6  each,  1  cheese  press  at  $4.47. 

5. 

Buy  from  Anderson  &  Ireland,  on  %,  30  doz.  carpet  stretchers,  at  $6  per  doz.,  20  doz.  Per- 
petual Carpet  Sweepers  at  $10  per  doz.,  1  doz  egg  beaters  at  $2.67  per  doz. 

Sell  Bailey  Bros.  &  Raub,  on  %,  24  gross  boxes  Enameline  at  $6.20  per  gross,  4  gross  Diamond 
Gimlets  at  $4  per  gross,  $1,000  ft.  hemp  fuse  for  2.54. 

Sell  to  J.  H.  Bowman  &  Co.,  on  %,  1  doz.  fishing  rods  $35.30  per  doz.,  1  doz.  jeweled  reels 
$50  per  doz. 

Pay  freight  on  goods  B.  &  O.  R.  R.,  $5.35. 

Pay  drayage,  Union  Drayage  Co.,  $3.25. 

Pay  for  repairs  to  store,  $25. 

Sell  to  Baltimore  Hardware  Co.,  on  %,  1  gross  sidewalk  cleaners  at  $40  per  gross,  4,000  ft. 
cotton  fuse  at  $3  per  M.,  1  doz.  lemon  squeezers,  porcelain  lined,  at  $6.10  per  doz. 

Sell  to  Oscar  Bear,  on  %,  2  doz.  mop  wringers  at  $12  per  doz.,  1  doz.  saw  sets  at  $6  per  doz., 
1  gross  slaw  cutters  at  $30  per  gross,  $6  doz.  electrical  spiral  screw  drivers  at  $6  per  doz.,  1  doz. 
Lightning  Nail  Pullers  at  $19.28  per  doz. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  12  doz.  Excelsior  Saw  Tools  at  $6  per  doz.,  6  doz.  screen 
doors  at  $10.50  per  doz.,  1  gross  flour  sifters  at  $5  per  gross,  2  doz.  carpet  sweepers  at  $22.50  per 
doz.,  1  doz.  garden  trowels,  at  $1.73  per  doz. 

Buy  from  Francis  Albert  &  Co.,  on  %,  48  doz.  Columbia  Tack  Pullers  at  $5  per  doz.,  10  gross 
skate  sharpeners  at  $18  per  gross,  4  gross  flour  sifters  at  $11.50  per  gross,  1  doz.  special  screw 
drivers  $6.37  per  doz. 

Receive  from  J.  R.  M.  Adams,  on  %,  check  for  $325. 

Cash  sales,  $103.17. 

6. 

Sell  to  Keystone  Hardware  Co.,  on  %,  5  doz.  imitation  walnut  screen  doors  at  $6.75  per  doz., 
5  doz.  carpet  stretchers  at  $6.75  per  doz.,  3  doz.  saw  vises  at  $20  per  doz.,  1  doz.  padlocks  $8.17 
per  doz. 

Sell  to  J.  R.  Emerson  &  Co.,  on  %,  2  doz.  carpenters'  saws  at  $30  per  doz.,  1  doz.  saw  sets 
$3.75  per  doz. 

Samuel  Emmert  accepted  our  draft  at  3  days'  sight,  payable  to  Henry  Disston's  Sons  for 
$100. 

Buy  from  National  Tool  &  Stamping  Co.,  on  %,  12  doz.  engineers'  wrenches  at  $26  per  doz., 
1  doz.  common  wrenches,  6  in.,  $12  per  doz. 

Sell  to  M.  L.  Bauserman,  Harrisonburg,  Va.,  on  %,  1  doz.  rip  saws,  $36.47  per  doz. 

Sell  to  Edward  Steiner,  on  %,  1  doz.  jack  screws  at  $103.15  per  doz. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  4  doz.  mortise  door  bolts  at  $36  per  doz.,  1  doz.  chain 
bolts  at  $6.75  per  doz. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      139 

7. 

James  Lower  draws  $15  for  expenses  and  $15  on  his  salary. 

Receive  from  J.  F.  Pearson  &  Co.,  on  %,  their  note  for  $127.75,  dated  Baltimore,  Md.,  Sept. 
7,  19 — ,  payable  60  days  after  date  with  interest  at  6%. 

Sell  to  Geo.  Keller,  on  %,  3  doz.  store  door  pulls  and  plates  at  $35  per  doz.,  1  doz.  letter-box 
plates  at  $20.65  per  doz. 

Sell  to  J.  C.  Bailey,  on  %,  10  gross  harness  snaps  at  $4.87  per  gross. 

Sell  to  Dillon  &  Co.,  Columbia,  Pa.,  on  %,  12  doz.  heavy  balances  at  $9  per  doz.,  5  doz.  nail 
hammers  at  $5  per  doz.,  1  doz.  escutcheons  at  $4.10  per  doz. 

Buy  from  Frank  B.  Sloan  &  Co.,  on  %,  10  doz.  heavy  door  locks  at  $24  per  doz.,  6  doz.  hotel 
coat  hooks  at  $5  per  doz.,  1  gross  harness  snaps  at  $3.87  per  gross. 

Buy  from  New  England  Cutlery  Co.,  New  Haven,  Conn.,  on  %,  12  gross  slaw  cutters  at  $30 
per  gross,  24  doz.  bread  knives  at  $3  per  doz.,  1  doz.  butcher  knives  at  $4.75  per  doz. 

Pay  salaries,  Edward  Jones,  clerk,  $14;  Emil  Cook,  clerk,  $16;  Mary  Brown,  Stenographer,  $10. 

Sell  to  J.  W.  Russell,  on  %,  12  doz.  Perfect  Oilers  at  $1.50  per  doz.,  1  gross  nail  sets  $2.50  per 
gross. 

Pay  freight  on  goods,  P.  R.  R.,  $3.75. 

Return  to  Anderson  &  Ireland  6  doz.  carpet  stretchers  at  $6.00  per  dozen,  because  defective. 

Cash  sales,  $96.45. 

9. 

Sell  to  Lindamuth  &  Co.,  Emmitsburg,  Md.,  on  %,  2  doz.  Ajax  Nail  Pullers  at  $7.50  per  doz., 
2  doz.  coffee  mills  at  $6  per  doz.,  2  doz.  butcher  knives  at  $4  per  doz.,  4  doz.  hay  unloaders  at  $10 
per  doz.,  1  doz.  lawn  sprinklers,  $29  per  doz. 

Sell  to  Union  Hardware  Co.,  on  %,  1  gross  egg  beaters  at  $5  per  gross,  10  disc  harrows  at  $12 
each,  24  doz.  corn  hooks  at  $3  per  doz.,  1  deep  well  pump  $15,  1  doz.  door  springs  at  $3.33  per 
doz. 

Cumberland  Hardware  Co.  accepted  our  30-day  draft  for  $250  payable  to  ourselves,  dated 
Sept.  8,  19—. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  20  hand  drills  at  $3  each,  1  doz.  sidewalk  cleaners  at  $5.25 
per  doz. 

Send  check  to  National  Tool  &  Stamping  Co.,  for  $325. 

John  Sellers  draws  $15  for  expenses  and  $25  on  salary. 

Miller  Supply  Co.  accepted  our  30-day  draft  for  $156.62,  made  payable  to  Maryland  Hinge 
Co.,  dated  Sept.  7,  19—. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  12  doz.  box  openers  at  $6  per  doz.,  8  gross  American 
Can  Openers  at  $2.02  per  gross. 

Sell  to  J.  R.  M.  Adams,  on  %,  1,000  lbs.  y§  in.  chain  at  $8.50  per  cwt.,  5  gross  crayons  at  $5.01 
per  gross. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  24  doz.  door  checks  at  $4.50  per  doz.,  1  doz  self-measur- 
ing faucets  at  $36  per  doz.,  2  doz.,  hedge  trimmers  at  $6.65  per  doz. 

Cash  sales,  $95.84. 

10. 

Give  your  note  for  60  days  to  Francis  Albert  &  Co.,  for  $814.24. 

George  Evans  draws  $7  on  salary. 

Sell  to  Keystone  Hardware  Co.,  15  hay  unloaders  at  $7  each,  10  doz.  hanging  hooks  at  $1.06 
per  doz. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  10  gross  cans  Lustrogen,  at  $6.20  per  gross,  1  doz.  farriers' 
knives  at  $3.89  per  doz. 


140       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  to  A.  B.  Cochrane  &  Co.,  on  %,  12  doz.  lemon  squeezers,  wood,  at  $5  per  doz.,  384  lbs. 
tin  lined  lead  pipe  at  10^  per  lb. 

Frank  Beall  &  Co.,  pay  our  sight  draft  for  $100. 

Sell  to  Miller  Hardware  Co.,  on  %,  10  deep  well  pumps  at  $14.50  each. 

Sell  to  George  Yakel  &  Co.,  on  %,  10  doz.  Daisy  Lawn  Sprinklers  at  $7  per  doz.,  1  gross  stove 
polish  at  $5.43  per  gross. 

Sell  to  Samuel  Emmert,  on  %,  2  tons  sash  weights  at  $26  per  ton,  6  doz.  rifle  cleaners  at  $3 
per  doz.,  1  doz.  Jumbo  Lawn  Rakes,  at  $6.23  per  doz. 

Cash  sales,  $65.33. 

11. 

Pay  drayage  to  date,  $3.45. 

Sell  to  Miller  Supply  Co.,  on  %,  10  doz.  Taintor's  Positive  Saw  Sets,  at  $18  per  doz.,  1  gross 
scythe  stones  at  $7.18  per  gross. 

Sell  to  Young  Bros.,  on  %,  24  sets  knives  and  forks  "Anchor"  brand  at  $3.25  per  set,  1  doz. 
Columbia  Tack  Pullers,  No.  1,  at  $5.10  per  doz. 

Receive  from  A.  B.  Cochrane  &  Co.,  on  %,  note  for  $215,  dated  Sept.  10,  19 — ,  due  30  days 
from  date  with  interest. 

Pay  Anderson  &  Ireland  $250  on  %,  by  check. 

Sell  to  J.  A.  Constantine,  on  %,  4  doz.  Pike's  Corundum  Scythe  Stones  at  $24  per  doz.,  4 
doz.  Leader  Scythe  Stones  at  $4  per  doz.,  1  doz.  box  scrapers  at  $3.40  per  doz. 

Cash  sales,  $132.48. 

12. 

Buy  from  William  H.  Cole  &  Son,  on  %,  12  gross  fly  traps  at  $12  per  gross,  48  doz.  Pastime 
Weed  Eradicators  at  $1.75  per  doz.,  1  gross  tinned  trowels,  at  $7.27  per  gross. 

James  Lower  drew  $15  for  traveling  expenses. 

George  Evans  drew  $10  on  salary. 

Sell  to  Frank  Beall,  on  %,  10  doz.  vestibule  latches  at  $12.53  per  doz. 

Sell  to  F.  H.  Davidson  &  Co.,  Charlottesville,  Va.,  on  %,  50  doz.  pairs  shutter  hinges  at  $2 
per  doz.,  10  doz.  chain  door  bolts  at  $4.06  per  doz. 

Wilcox  Hardware  Co.  accepted  our  draft  for  $175  at  30  days. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  1  doz.  large  door  pulls  and  plates,  $57.30  per  doz. 

Send  check  to  Henry  Disston's  Sons,  on  %,  for  $150. 

Sell  to  Cumberland  Hardware  Co.",  on  %,  24  doz.  push  plates  at  $5  per  doz.,  10  doz.  drawer 
pulls  at  $5.01  per  doz. 

Cash  sales,  $102.40. 

13. 

Sell  to  J.  C.  Bailey,  on  %,  1  gross  transom  casters,  $30.76  per  gross. 

Sell  to  George  Keller,  on  %,  1  doz.  sliding  door  locks,  at  $24.60  per  doz. 

J.  F.  Pearson  &  Co.,  returned  from  bill  of  the  10th  instant,  defective  goods  amounting  to  $10 
which  we  bought  from  Anderson  &  Ireland,  and  return  to  them,  charging  them  $7.50  as  per  their 
invoice  to  us. 

Sell  to  Bailey  Bros.  &  Raub,  on  %,  75  doz.  clothes  line  hooks  at  $1.20  per  doz.,  40  doz.  De- 
fiance Sash  Fasteners  at  90f£  per  doz.,  1  doz.  cow  bells  at  $11.66  per  doz. 

Sell  to  J.  W.  Russell,  on  %,  40  doz.  axle  pulleys  at  $1.80  per  doz.,  6  doz.  awning  pulleys  at 
$2.50  per  doz.,  1  gross  harness  snaps  at  $2.97  per  gross. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  50  gross  double  pointed  tacks,  No.  9,  at  $1.20  per 
gross;  1  gross  small  hat  hooks  at  $3.30  per  gross. 

Cash  sales,  $140.17. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      141 

14. 

Oscar  Bear  pays  our  draft  at  sight  for  $115.28. 

Sell  to  Baltimore  Hardware  Co.,  Baltimore,  Md.,  on  %,  100  doz.  brass  cornice  plates  at  50£, 
20  doz.  paper  files  at  $1.50  per  doz.,  1  doz.  shelf  brackets  $3.17  per  doz. 

Receive  from  Central  Pa.  Supply  Co.,  note  for  $135.76,  dated  Sept.  13,  due  60  days  from  date 
with  interest  at  6%. 

Sell  to  Union  Hardware  Co.,  on  %,  1  doz.  Kentucky  Cow  Bells  at  $12  per  doz.,  2  doz  carpet 
sweepers  at  $24  per  doz.,  6  doz.  drawing  knives  at  $7  per  doz.,  6  doz.  small  hand  saws  at  $7  per  doz., 
1  gross  bird  cage  hooks  at  $22.50  per  gross,  1  doz.  clothes  line  hooks  at  $1.25  per  doz. 

Sell  to  J.  R.  M.  Adams,  on  %,  1  gross  cupboard  casters  at  $10.35  per  gross. 

Pay  salaries  as  follows:  Clerks,  $30;  stenographer,  $10. 

Sell  to  M.  L.  Bauserman,  on  %,  1  doz.  shingling  hatchets  at  $5.40  per  doz.,  1  doz.  drawing 
knives  at  $15  per  doz.,  6  doz.  curry  combs  at  $5  per  doz.,  1  doz.  food  choppers  $23.44  per  doz. 

Cash  sales,  $128.05. 

Take  a  Trial  Balance  at  this  point  and  submit  same  for  approval. 

16. 

Pay  for  repairs  to  roof,  $15.75. 

Pay  for  drayage  to  date,  $4.25. 

Receive  from  Edward  Steiner  &  Co.,  on  %,  check  for  $174. 

Sell  to  J.  H.  Bowman,  Hanover,  Pa.,  on  %,  3  doz.  store  door  locks  at  $12  per  doz.,  1  doz. 
wrought  iron  padlocks,  $6.12  per  doz. 

Give  William  H.  Cole  &  Son,  on  %,  note  for  $275,  dated  Sept.  16,  19 — ,  due  30  days  from  date 
with  interest. 

Sell  Dillon  &  Co.,  on  %,  75  doz.  spring  balances  at  $1.30  per  doz.,  1  doz.  clothes  line  hooks 
$1.20  per  doz. 

Pay  freight  P.  R.  R.,  $6.25. 

Cash  sales,  $84.92. 

17. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  3  gross  screw  drivers  at  $30  per  gross,  1  doz.  heavy  spring 
balances  $3.45  per  doz. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  24  adjustable  iron  planes  at  85^  each,  1  doz.  iron  boot 
jacks,  $3.97  per  doz. 

Receive  from  George  Yakel  &  Co.,  on  %,  check  for  $300. 

Receive  from  Lindamuth  &  Co.,  their  note  for  $104  dated  Sept.  16,  19 — ,  due  in  90  days 
with  interest  at  6%. 

Sell  to  F.  H.  Davidson  &  Co.,  on  %,  1  doz.  rip  saws,  $30.15  per  doz. 

Sell  to  Keystone  Hardware  Co.,  on  %,  2  bench  vises  at  $10  each,  1  jack  screw,  $5.73. 

Receive  from  Bailey  Bros.  &  Raub,  on  %,  check  for  $210. 

Cash  sales,  $120.67. 

18. 

John  Sellers  draws  $15  for  traveling  expenses. 

Give  Henry  Disston's  Sons,  on  %,  note  at  30  days  for  $160,  with  interest. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  18  sets  steel  chisels  at  $5  per  set,  1  doz.  steel  nail  ham- 
mers at  $6.10  per  doz. 

Sell  to  A.  B.  Cochrane  &  Co.,  on  %,  40  doz.  boxes  carpet  tacks  at  $1.60  per  doz.,  1  doz.  door 
springs  at  $1.87  per  doz. 

Sell  to  Miller  Supply  Co.,  on  %,  3  doz.  Gem  Food  Choppers  at  $37  per  doz.,  1  doz.  engineers' 
wrenches,  $26.67  per  doz. 


142       MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

Receive  from  C.  C.  Pursey  &  Co.,  on  %,  check  for  $50. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  1  doz.  panel  saws,  $25.06  per  doz. 

Cash  sales,  $67.34. 

19. 

Sell  to  J.  R.  Emerson  &  Co.,  on  %,  1|  doz.  drawing  knives  at  $30  per  doz.,  1  doz.  expansive 
bit  cutters,  $2.60  per  doz. 

Sell  to  Oscar  Bear,  on  %,  5  doz.  Monarch  Carpet  Sweepers,  at  $20  per  doz.,  1  doz.  porcelain 
door  knobs  at  $3.67  per  doz. 

Buy  from  New  England  Cutlery  Co.,  on  %,  2  doz.  drawing  knives  at  $25  per  doz.,  1  set  steel 
chisels,  $7.48. 

Buy  from  F.  B.  Sloan  &  Co.,  on  %,  20  gross  Columbia  Spring  Hinges  at  $18  per  gross,  2  doz. 
hedge  trimmers  at  $8.32  per  doz. 

Receive  from  Marshall,  Wescoat  &  Co.,  on  %,  their  note  at  90  days  for  $240.75. 

Sell  to  Samuel  Emmert,  on  %,  4  doz.  hand  saws  at  $9.60  per  doz.,  24  doz.  floor  hooks  at  $1.40 
per  doz.,  1  shallow  well  pump,  $12.95. 

Sell  to  J.  A.  Constantine,  on  %,2  doz.  Monarch  Carpet  Sweepers  at  $20  per  doz.,  1  doz.  carpet 
stretchers  at  $6.28  per  doz. 

Sell  to  Edward  Steiner&Co.,on  %,  25  doz.  corn  hooks  at  $3  per  doz.,  1  horse  clipping  machine, 
$8.17. 

Cash  sales,  $87.13. 

20. 

John  Sellers  draws  $20  on  salary. 
•  James  Lower  draws  $15  for  traveling  expenses. 

Pay  drayage  to  date,  $4.15. 

Pay  freight,  B.  &  O.  R.  R.,  $6.35. 

Receive  from  Union  Hardware  Co.,  an  express  package  containing  $265  to  apply  on  account. 

Sell  to  Young  Bros.,  on  %,  1  doz.  New  Chicago  Horse  Clippers,  $105.66. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  5  doz.  Transparent  Carpet  Sweepers  at  $32  per  doz.,  1  doz. 
Sampson  Cork  Screws,  $5.86. 

Sell  to  Geo.  Keller,  on  %,  9  doz.  Keystone  Egg  Beaters  at  $6  per  doz.,  1  doz.  corn  compres- 
sors at  $2.73  per  doz. 

Cash  sales,  $58.74. 

21. 

Buy  from  Henry  Disston's  Sons,  on  %,  10  doz.  butchers  saws  at  $20  per  doz.,  1  doz.  small 
hand  saws,  $10.86. 

Buy  from  William  H.  Cole  &  Son,  on  %,  25  doz.  Wadsworth's  Hedge  Trimmers  at  $8  per  doz., 
36  doz.  serrated  hay  knives  at  $10  per  doz.,  2  doz.  gate  hinges  at  $6.68  per  doz. 

Pay  salaries  as  follows:  Clerks,   $30;  stenographer,   $10. 

Sell  to  J.  R.  M.  Adams,  on  %,  2  doz.  Family  Cherry  Stoners  at  $5  per  doz.,  1  doz.  coffee  mills 
at  $10  per  doz.,  5  doz.  door  checks  at  $12  per  doz.,  6  doz.  breast  drills  at  $10  per  doz.,  1  doz. 
can  openers  at  $2.78. 

Sell  to  C.  C.  Pursey,  on  %,  1  gross  blue  crayons  $8.30. 

Sell  to  J.  C.  Bailey,  on  %,  cistern  pump,  $15.25. 

Receive  from  Keystone  Hardware  Co.,  on  %,  check  for  $500. 

George  Evans  draws  $15  on  his  salary. 

Cash  sales,  $163.24. 

23. 

Pay  plumber  for  repairing  gas  and  water  pipes  in  the  store,  $30.45. 
Pay  water  rent,  $15. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      143 


Sell  to  Miller  Hardware  Co.,  on  %,  1  doz.  can  openers  at  $8  per  doz.,  5  corn  cultivators  at 
each,  1  doz.  Whitney's  Hand  Drills,  $12.10. 

Buy  from  Francis  Albert  &  Co.,  on  %,  60  gross  Pullman's  Garment  Hangers  at  $9  per  gross, 
20  doz.  barn  door  hangers  at  $7  per  doz.,  1  doz.  gate  hinges  at  $7.32  per  doz. 

Buy  from  Maryland  Hinge  Co.,  on  %,  200  doz.  barn  door  latches  at  $2  per  doz.,  36  doz. 
Shepard's  Gate  Hinges  at  $5  per  doz,,  1  doz.  show  case  hinges  at  $7.62  per  doz. 

Sell  to  J.  W.  Russell,  on  %,  1  doz.  mitre  boxes  at  $37.60. 

Sell  to  Baltimore  Hardware  Co.,  on  %,  3  doz.  Matchless  Mop  Wringers  at  $12  per  doz.,  2  doz. 
braided  ventilator  cords  at  $5.80  per  doz. 

Dillon  &  Co.,  pay  our  sight  draft  for  $175. 

Received  from  Wilcox  Hardware  Co.,  on  %,  check  for  $370. 

Cash  sales,  $87.42. 

24. 

A.  E.  Trader  draws  for  private  use,  $150. 

James  Lower  draws  $15  for  traveling  expenses. 

Sell  to  Bailey  Bros.  &  Raub,  on  %,  10  doz.  bicycle  locks  at  $9  per  doz.,  1  gross  ice  drippers, 
$6.37  per  gross. 

Sell  to  Frank  Beall  &  Co.,  on  %,  18  Pastime  Lawn  Mowers  at  $6  each,  1  doz.  lawn  sprinklers 
at  $10.47  per  doz. 

Pay  for coal  bill,  $27. 

Student's  name 

Pay  freight,  B.  &  O.  R.  R.,  $5.65. 

Sell  to  Union  Hardware  Co.,  on  %,  10  potato  diggers  at  $15  each,  1  gross  nail  sets,  $6.10  per 
gross. 

Send  William  H.  Cole  &  Son  check  for  $175. 
Cash  sales,  $42.26. 

25 

Receive  from  F.  H.  Davidson  &  Co.,  Charlottesville,  Va.,  on  %,  their  note  dated  Sept.  23, 
19—,  at  60  days  for  $170.75  with  interest. 

We  endorse  the  above  note  and  send  it  to  Frank  B.  Sloan  &  Co.,  on  %. 

Sell  M.  L.  Bauserman  &  Co.,  on  %,  9  doz.  Advance  Apple  Parers  at  $4.50  per  doz.,  1  gross 
pkgs.  stove  polish,  $5.34  per  gross. 

Sell  to  Lindamuth  &  Co.,  on  %,  100  doz.  cans  metal  polish  at  $1.25  per  doz.,  6  doz.  split 
handle  post  hole  diggers  at  $7.50  per  doz.,  1  doz.  Queen  Lawn  Rakes,  $4.87  per  doz. 

Sell  to  J.  H.  Bowman  &  Co.,  on  %,  2  doz.  pruning  hooks  at  $12  per  doz.,  1  lift  pump,  $9.67. 

George  Evans  draws  $5  on  his  salary. 

Buy  from  New  England  Cutlery  Co.,  on  %,  20  doz.  W.  &  B.  Razors  at  $15  per  doz.,  48  doz. 
butcher  knives  at  $1.50  per  doz.,  100  doz.  pocket  knives  at  $3.10  per  doz.,  1  doz.  Electric  Razors, 
$10.50  per  doz. 

Cash  sales,  $93.34. 

26. 

Buy  from  Anderson  &  Ireland,  on  %,  24  gross  corn  poppers  at  $10.50  per  gross,  20  doz. 
Vaughan's  Post  Hole  Diggers  at  $6  per  doz.,  1  gross  carpenters'  pencils,  $3.12  per  gross. 

Buy  from  National  Tool  &  Stamping  Co.,  on  %,  50  doz.  Excelsior  Saw  Sets  at  $6  per  doz., 
36  doz.  hack  saw  frames  at  $3  per  doz.,  1  complete  saw  filer,  $18.34. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  6  Barnes  Scroll  Saws  No.  7,  at  $15  each,  1  gross  scythe 
stones,  $5.46  per  gross. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  1,000  transom  lifters  at  $13  per  C,  1  doz.  rat  traps,  No. 
3|,   $4.80. 

Receive  from  George  Keller  on  %,  note  for  $346.18,  dated  Winchester,  Va.,  Sept.  25,  19 — , 
due  30  days  after  date  with  interest. 


144       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  to  Keystone  Hardware  Co.,  on  %,  1  gross  Hoppers'  Can  Openers  at  $15  per  gross,  5 
"Pony"  plows  at  $15  each,  300  lbs.  jin.  chain  at  $5.50  per  cwt.,  1  doz.  Perfect  Curry  Combs  at 
$5.55. 

Pay  drayage  to  date,  $3.45. 

Pay  for  advertising,  $15. 

Cash  sales,  $114.18. 

27. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  2  doz.  carpet  stretchers  at  $6  per  doz.,  3  doz.  Sampson 
Cork  Screws  at  $10  per  doz.,  1  doz.,  mail  boxes  at  $15  per  doz.,  4  doz.  rip  saws  at  $23.25  per  doz., 
2  doz.  door  springs  at  $3.50  per  doz.,  1  doz.  butcher  knives,  $3.75. 

Receive  from  J.  W.  Russell,  on  %,  check  for  $150. 

Sell  to  A.  B.  Cochrane  &  Sons,  on  %,  10  gross  boxes  Enameline  at  $7.20  per  gross,  15  doz. 
No.  0  frying  pans  at  $3  per  doz.,  50  cans  lubricating  graphite  at  20^  per  can,  1  doz.  cans  U.  S. 
Metal  Polish,  $1.34  per  doz. 

Buy  from  Henry  Disston's  Sons,  on  %,  1  doz.  band  saws  $125,  3  doz.  circular  saws  at  $60  per 
doz.,  6  doz.  cross-cut  saws  at  $25  per  doz.,  \  doz.  butchers'  saws  at  $11  per  doz. 

Sell  to  George  Yakel  &  Co.,  on  %,  25  doz.  Universal  Can  Openers  at  $3  per  doz.,  1  doz.  cherry 
stoners  $6  per  doz.,  1  gross  crayons,  $5.73. 

J.  R.  Emerson  &  Co.,  accept  your  draft  at  30  days  for  $160,  payable  to  Francis  Albert  &  Co. 
Send  the  draft  to  Francis  Albert  &  Co. 

Sell  to  Oscar  Bear,  on  %,  4  doz.  Challenge  Sidewalk  Cleaners  at  $3.25  per  doz.,  1  American 
Meat  Cutter  No.  322,  $65,  1  doz.  Phoenix  Curry  Combs  at  $9.34  per  doz. 

Sell  to  Miller  Supply  Co.,  on  %,  30  doz.  box  openers  at  $5  per  doz.,  1  doz.  Perpetual  Carpet 
Sweepers  at  $18.37  per  doz. 

John  Sellers  draws  $15  for  traveling  expenses. 

Receive  from  Miller  Supply  Co.,  on  %,  check  for  $525. 

Cash  sales,  $137.85. 

28. 

George  Evans  draws  $12  on  his  salary. 

Pay  house  rent  for   $75. 

Student's  name 

Buy  from  William  H.  Cole  &  Son,  on  %,  50  doz.  fancy  screen  doors  at  $10  per  doz.  1  doz. 
X-Y  screen  doors,  $10.78. 

Pay  for  cleaning  windows,  $2.50. 

Pay  salaries  as  follows:  Clerks,  $30;  stenographer,  $10. 

Sell  to  J.  A.  Constantine,  on  %,  5  doz.  Marion  Carpet  Sweepers  at  $24  per  doz.,  1  doz.  door 
springs,  $1.45. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  10  Lightning  Belt  Clipping  Machines  at  $13.40  each. 

Receive  from  Baltimore  Hardware  Co.,  on  %,  check  for  $150. 

Sell  to  Edward  Steiner  &  Co.,  on  %,  225  lbs.  assorted  cold  chisels  at  18^  per  lb.,  1  doz.  door 
springs,  $1.80. 

Send  New  England  Cutlery  Co.,  on  %,  check  for  $785. 

Cash  sales,  $240.86. 

30. 

Buy  from  Maryland  Hinge  Co.,  on  %,  50  doz.  Western  Gate  Hinges  at  $4.20  per  doz.,  6  doz. 
reversible  gate  hinges  at  $5.60  per  doz.,  1  doz.  show  case  hinges,  $3.55. 

Sell  to  Cumberland  Hardware  Co.,  on  %,  10  doz.  panel  saws  at  $12.58  per  doz. 
Sell  to  Young  Bros.,  on  %,  10  doz.  electric  spiral  screw  drivers  at  $7.53  per  doz. 
J.  A.  Constantine  pays  our  sight  draft  for  $215. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      145 

Sell  Samuel  Emmert,  on  %,  10  doz.  Sampson  Cork  Screws  at  $10  per  doz.,  1  gross  crayons  at 
$5.70. 

Receive  from  Miller  Hardware  Co.,  on  %,  check  for  $250. 

Receive  from  J.  R.  M.  Adams,  on  %,  bank  draft  for  $245. 

Receive  from  C.  S.  Pitcher,  on  %,  check  for  $175. 

Receive  from  J.  C.  Bailey,  on  %,  note  for  $161.86  dated  Woodstock,  Va.,  Sept.  27,  19 — ,  due 
30  days  after  date  with  6%  interest. 

Cash  sales,  $127.68. 

Send  Anderson  &  Ireland  your  check  for  $215. 

Credit  James  Lower,  John  Sellers,  George  Evans  and for  their  salaries. 

Student's  name 

Inventories  for  closing  the  books — 

Merchandise $12,450. 00 

Store  and  Office  Fixtures 600. 00 

Insurance 55 .  00 

164.  Take  a  Trial  Balance  and  close  the  books.  Make  a  Six  Column  Statement,  and  using 
it  as  a  guide,  write  up  a  Statement  of  Profits  &  Losses  and  a  Balance  Sheet  following  the  forms 
given  on  pages  226,  227  and  232.  You  will  notice  that  the  Statement  of  Profits  and  Losses  corre- 
sponds with  the  Loss  &  Gain  columns  of  the  Six  Column  Statement  as  far  as  amounts  are  concerned. 
It,  however,  explains  the  various  items  more  fully  and  clearly  than  they  can  be  explained  in  the  old 
style  statement.  You  will  also  notice  that  the  Balance  Sheet  corresponds  in  the  same  way  with  the 
Resource  and  Liability  columns  of  the  Six  Column  Statement. 

Make  an  individual  statement  for  each  customer's  account,  see  that  the  Bill  Book  is  properly 
written  up  and  proved,  make  out  ten  bills  for  goods  sold,  ten  checks  for  money  paid,  ten  receipts 
for  money  received,  and  all  of  the  notes  and  drafts  issued. 

WRITTEN  TEST  11. 

1.  Describe  the  effects  of  a  debit  upon  the  business;  the  effects  of  a  credit. 

2.  Why  is  the  balance  of  Loss  and  Gain  account,  not  carried  below  the  double  rulings? 

3.  Why  do  you  carry  forward  the  totals  of  the  sides,  when  forwarding  the  Cash  account  or 
any  other  accounts  representing  the  business? 

4.  Why  do  you  forward  only  the  balance,  when  carrying  forward  personal  accounts? 

5.  Why  is  the  Inventory  placed  on  the  credit  side  of  a  property  account,  before  closing  it? 

6.  Why  does  the  balance  of  Mdse.  account,  very  rarely  show  the  true  value  of  Mdse.  on  hand? 

7.  There  are  certain  accounts  that  always  show  a  debit  balance,  if  any;  others  a  credit 
balance  if  any.  Name  five  such  accounts  and  tell  which  side  of  each  will  be  the  larger,  if  there  is 
any  balance,  and  why. 

8.  Why  are  bills  receivable  and  bills  payable  always  debited  and  credited  at  their  face  value? 

9.  How  can  you  prove  the  accuracy  of  Bills  Receivable,  Cash,  and  Personal  accounts? 

10.  Mention  three  property  accounts  that  do  not  show  either  a  gain  or  a  loss. 

11.  Name  four  errors  that  will  not  affect  the  equality  of  the  Ledger. 

12.  Give  the  several  tests  to  be  applied  in  case  the  Trial  Balance  does  not  balance. 

13.  If  the  trial  balance  does  balance  is  that  proof  that  the  work  is  correct? 

14.  Will  the  trial  balance  balance  if  the  balances  of  some  accounts  and  the  totals  of  others 
are  included?    Why? 

15.  After  the  Ledger  is  closed  what  do  the  accounts  show?     Will  it  still  be  in  balance? 

16.  May  the  proprietor's  Private  account  be  dispensed  with?    How? 

17.  How  may  a  person  begin  business  insolvent? 

18.  If  you  began  business  insolvent  to  the  extent  of  $1500  and  at  the  end  of  a  year  were 
solvent,  worth  $500.     Did  you  gain  or  lose  and  how  much?    Prove  answer. 

19.  What  are  Annual  Statements  and  what  should  they  contain?    What  is  a  Balance  Sheet? 


146 


COLUMNAR  CASH  BOOK. 


COLUMNAR  CASH  BOOK. 


147 


CASH    DISC'T                EvpENSE   DEBITS 
ON  PURCHASES              EXPENSE   DEBITS 

MISCL.    DEBITS 

TOTAL 

111 

Oct.     2            Expense           Sept.  gas 

-< 

19    50 

4    80     Henry  Jones  &  Son,  $1560 

31 

20 

1528 

80 

9/27 

5 

45 
52 

Bills  Payable  H.  M.  Co. 

8/6 
Int.  Bills  Payable  "   "   " 

8/6 

4000 
40 

6 

15 

Salaries    pay  roll 

240 

17 

Wages 

1260 

8 

Expense    repairs 
Expense    Oct    rent 

10 
500 

50 

9 

81 
19 

Worcester  Mfg.  Co.,  $2400 

9/30 
Store  &  Office  Fix.      desk 

48 

• 

2352 
65 

10    19 

Store  &  Office  Fix.     files 

47 

50 

11    82 

Union  Hdwe.  Co.,  $675 

13 

50 

661 

50 

10/1 

Expense    telephone 

7 

50 

13    15 

Salaries    pay  roll 

255 

17 

Wages         "       " 

1750 

Expense     repairing 

17 

42 



Expense    painting  sign 

28 

50 

22 

Teams    sorrel  horse 

275 

15    83 

J.  W.  Russell,  Inc.,  $987 

19 

74 

967 

26 

10/8 

84 

Jno.  Wanamaker,  $1200 
10/9 

24 

1176 

85 

Moore  &  Co.,  $800 
10/6 

Cash  Disct.  Pur.  Cr. 
Expense  Charges     Dr. 

16 

784 

15402 
583 

30 

152 

44 

06 

32 

42 

Balance 

10807 

41 

26792 

89 

148       MODERN  BOOKKEEPING,   ACCOUNTING  AND  BUSINESS  PRACTICE. 

A  Columnar  Gash  Book. 

165.  Just  as  an  Invoice  Book  and  a  Sales  Book  are  used  to  save  work  in  posting,  a  Columnar 
Cash  Book  is  in  very  general  use  for  the  same  purpose.  If  a  Cash  Book  is  used  that  has  four 
money  columns  on  the  debit  side  and  four  money  columns  on  the  credit  side,  the  four  money  columns 
on  the  debit  side  may  be  used  as  follows; — the  first  for  "Cash  Discount  on  Sales"  Debits,  the  second 
for  Merchandise  Credits,  the  third  for  Miscellaneous  Credits  and  the  fourth  as  a  Total  column.  If 
the  four  money  columns  on  the  debit  side  of  the  cash  book  are  used  in  this  way,  when  a  man  to 
whom  you  have  sold  a  bill  of  goods  and  to  whom  you  have  charged  the  goods  on  your  books  at  the 
full  price,  takes  advantage  of  the  discount  offered  for  payment  of  the  bill  before  it  becomes  due,  you 
enter  the  face  of  the  bill  in  "short"  on  the  debit  side  of  your  Cash  Book  and  extend  the  amount  of 
the  cash  actually  received  into  the  Miscellaneous  Credits  column  and  the  amount  of  the  discount 
into  the  Cash  Discount  on  Sales  column.  In  posting,  the  face  of  the  bill  as  entered  in  "short"  is 
posted  to  the  credit  side  of  the  customer's  account  and  this  credit  is  balanced  by  the  two  debits, 
the  one  to  Cash  for  the  amount  of  cash  actually  received  and  the  other  to  Cash  Discount  on  Sales 
for  the  amount  of  the  Discount  allowed.  The  Cash  Discount  on  Sales  column  is  forwarded  from 
page  to  page  and  at  the  end  of  the  month  the  total  is  carried  to  the  debit  side  of  the  Cash  Dis- 
count on  Sales  account,  thus  saving  the  posting  of  each  discount  allowed  separately  to  this  account. 

166.  In  a  Columnar  Cash  Book  of  this  kind  used  as  above  outlined,  when  Merchandise  is 
sold  for  cash,  the  amount  is  entered  in  the  Merchandise  Cr.  column  and  the  totals  of  this  column 
are  carried  forward  from  page  to  page  until  the  end  of  the  month  and  the  total  amount  is  posted 
in  one  entry  to  the  credit  side  of  the  Merchandise  Sales  account,  thus  saving  the  posting  of  each 
cash  sale  separately  to  the  Merchandise  Sales  account. 

167.  In  a  Columnar  Cash  Book,  all  of  the  Miscellaneous  credits  are  posted  separately  to 
the  credit  side  of  the  appropriate  accounts  and  the  posting  folio  is  put  in  the  folio  column  as  the  post- 
ing is  done.  In  order  to  avoid  danger  of  posting  separately  items  that  are  entered  in  special 
columns,  the  totals  of  which  are  to  be  posted,  it  is  well  to  put  a  check  mark  in  the  folio  column  on 
a  line  with  each  item  of  this  kind  at  the  time  the  original  entry  is  made. 

168.  In  using  a  Columnar  Cash  Book  as  above  directed,  at  the  end  of  the  month  the  total 
of  the  Merchandise  column  and  the  total  of  the  Miscellaneous  column  are  extended  into  the  Total 
column  but  the  total  of  the  Cash  Discount  on  Sales  column  is  not  extended  into  the  Total  column 
since  the  items  of  the  Cash  Discount  on  Sales  column  do  not  represent  cash  received. 

169.  In  a  Cash  Book  that  has  four  money  columns  on  the  credit  side,  the  first  money  column 
may  be  used  for  "Cash  Discount  on  Purchases"  Credits,  the  second  for  General  Expense  Debits, 
the  third  for  Miscellaneous  Debits  and  the  fourth  as  a  Total  column. 

170.  If  the  four  money  columns  on  the  credit  side  of  the  Cash  Book  are  used  in  the  way  just 
mentioned  when,  after  having  credited  a  man  with  the  face  of  a  bill  that  we  have  purchased  from 
him,  we  take  advantage  of  the  discount  that  he  allows  for  payment  before  the  bill  becomes  due, 
we  enter  the  face  of  the  bill  in  "short"  on  the  credit  side  of  the  Cash  Book  and  extend  the  amount 
of  cash  actually  paid  into  the  Miscellaneous  Debits  column  and  the  amount  of  discount  saved  into 
the  Cash  Discount  on  Purchases  column.  In  posting,  the  face  of  the  bill  as  entered  in  "short" 
is  posted  to  the  debit  side  of  the  creditor's  account  and  this  debit  is  balanced  by  two  credits,  the 
one  to  Cash  for  the  amount  of  cash  actually  paid  out  and  the  other  to  Cash  Discount  on  Purchases 
for  the  amount  of  the  discount  saved. 

171.  The  Cash  Discount  on  Purchases  column  is  forwarded  from  page  to  page  and  at  the 
end  of  the  month  the  total  is  carried  to  the  credit  side  of  the  Cash  Discount  on  Purchases  account, 
thus  saving  the  posting  of  each  discount  saved  separately  to  this  account. 

172.  In  a  Columnar  Cash  Book  of  this  kind,  used  as  above  outlined,  when  items  chargeable 
to  General  expense  are  purchased  for  cash,  the  amount  is  entered  in  the  General  Expense,  Dr. 
column  and  the  totals  of  this  column  are  carried  forward  from  page  to  page  until  the  end  of  the 
month  and  the  total  amount  is  posted  in  one  entry  to  the  debit  side  of  the  General  Expense  account, 
thus  saving  the  posting  of  each  cash  general  expense  item  separately  to  the  General  Expense 
account. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      149 

173.  In  a  Columnar  Cash  Book,  all  of  the  Miscellaneous  debits  are  posted  separately  to  the 
debit  side  of  the  appropriate  accounts  and  the  posting  folio  is  put  in  the  folio  column  as  the  posting 
is  done. 

174.  On  the  credit  side  as  well  as  on  the  debit  side,  a  check  mark  should  be  placed  at  the 
time  of  making  the  original  entry,  in  the  folio  column  on  the  line  with  such  entries  as  will  not  be 
posted  separately  because  they  are  extended  into  special  columns,  the  totals  of  which  are  to  be 
posted. 

175.  With  the  credit  money  columns  of  a  Columnar  Cash  Book  used  as  above  directed,  at 
the  end  of  the  month,  the  total  of  the  Expense  column  and  the  total  of  the  Miscellaneous  column 
are  extended  into  the  total  column  because  they  represent  money  paid  out,  but  the  total  of  the 
Cash  Discounts  on  Purchases  column  is  not  so  extended  because  the  amounts  entered  in  this 
column  do  not  represent  money  paid  out. 

176.  For  an  illustration  of  a  Columnar  Cash  Book  used  as  above  outlined,  see  pages  146-147 

177.  A  Columnar  Cash  Book  may  have  any  number  of  debit  columns  and  any  numher  of 
credit  columns,  according  to  the  minuteness  of  classification  of  receipts  and  expenditures  desired 
in  the  business  for  which  the  books  are  kept.  Each  additional  column  is  handled  in  a  manner 
similar  to  the  handling  of  the  columns  herein  described. 

178.  The  chief  object  of  a  large  number  of  columns  in  a  columnar  Cash  Book  is  the  close 
analysis  of  sources  of  income  and  expenditures  secured  with  a  minimum  of  work  in  posting.  The 
largest  stock  columnar  books  to  be  found  at  the  stationery  stores  contain  24  money  columns.  In 
some  businesses,  one  book  is  used  as  a  debit  Cash  Book  and  another  book  as  a  credit  Cash  Book, 
thus  permiting  the  use  of  24  debit  columns  and  24  credit  columns  in  the  Cash  Book. 

179.  Columnar  Journals  are  used  in  much  the  same  way  as  Columnar  Cash  Books  and  for 
the  same  reasons. 

SET  4. 

WHOLESALE  HARDWARE  BUSINESS  OF &   CO. — CONTINUED. 

Student's  name 

180.  In  this  set  you  may  use  a  Columnar  Cash  Book  in  accordance  with  the  explanation  in 
articles  165  to  175  and  may  use  a  four  column  Journal. 

In  the  Journal  use  the  first  debit  column  for  Miscellaneous  debits  and  the  second  debit  column 
for  Bills  Receivable  debits.  Use  the  first  credit  column  for  Miscellaneous  credits  and  the  second 
credit  column  for  Bills  Payable  credits.  Use  a  Bill  Book  for  details  of  Bills  Receivable  and  Bills 
Payable.  Continue  to  use  the  Sales  Book,  Invoice  Book,  Petty  Cash  and  subdivisions  of  the  Mer- 
chandise account  as  in  the  preceding  set. 

OCT.  1,  19—. 

Receive  from  Frank  Beall  &  Co.,  check  for  $468.87,  in  full  of  account. 

Pay  store  rent  for  Oct.,  $100. 

Sell  merchandise,  on  %,  as  follows: 

Marshall,  Wescoat  &  Co.,  5  doz.  butcher  knives  at  $3.50  per  doz.,  10  kegs  horse  shoes  at  $4 
per  keg,  1  doz.  lawn  sprinklers  No.  1,  at  $12  per  doz.,  5  doz.  barn  door  latches  at  $2  per  doz.,  4 
doz.  bicycle  locks  at  $9  per  doz.,  6  doz.  bread  knives  at  $1.50  per  doz.,  4  doz.  ice  shredders  No.  34, 
at  $15  per  doz.,  2  doz.  sauce  pans  at  $5  per  doz.,  3  doz.  corn  hooks  at  $3  per  doz.,  1  doz.  ice  cream 
freezers  at  $12,  1  doz.  meat  juice  extractors  at  $18.50,  1  doz.  adjustable  drawing  knives  at  $11.32. 

C.  S.  Pitcher  &  Co.,  1  gross  Socket  Carpet  Stretchers,  at  $24, 1  doz.  Monarch  Carpet  Stretch- 
ers at  $24,  2  doz.  Marion  Carpet  Sweepers  at  $23.90  per  doz. 

F.  H.  Davidson  &  Co.,  5  doz.  shovels  at  $5  per  doz.,  1  doz.  Easy  Lawn  Swings  at  $75,  20  doz. 
cherry  stoners  at  $5  per  doz.,  10  gross  Enameline  at  $4.50  per  gross,  1  doz.  strap  hinges  $1.84, 
2  American  Meat  Cutters  at  $5  each. 

Cash  sales,  $156.75. 

Finding  that  the  cash  on  hand  is  much  more  than  is  necessary  to  conduct  the  business,  the 
firm  has  decided  to  reduce  its  capital  $15,000,  each  partner  withdrawing  one-half  that  amount  in 
cash.     (Charge  Stock  accounts.) 


150       MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

2. 

Buy  from  Francis  Albert  &  Co.,  on  %,  50  steel  track  hay  unloaders  at  $12  each,  20  doz. 
sickle  edge  hay  knives  at  $10  per  doz.,  10  gross  garment  hangers  at  $7.56  per  gross. 

Send  check  to  William  H.  Cole  &  Son  for  $611.24  to  pay  note  due  tomorrow,  interest  thereon, 
and  $500  on  account. 

Sell  merchandise  on  %,  as  follows: 

George  Keller,  6  doz.  Western  Gate  Hinges  at  $4  per  doz.,  6  doz.  lawn  rakes  at  $5  per  doz., 
2  doz.  rifle  cleaners  at  $3  per  doz.,  3  windmill  pumps  at  $15  each,  1  doz.  Lane's  Covered  Barn  Door 
Hangers  at  $13.75,  3  American  Meat  Cutters  No.  3,  at  $50  each,  6  doz.  Sampson  Cork  Screws  at 
$10  per  doz. 

Wilcox  Hardware  Co.,  30  doz.  parlor  door  hangers,  ball  bearing,  at  $4.15  per  doz.,  1  doz. 
prs.  show  case  hinges  at  $10.90. 

James  Lower  draws  $40  for  personal  use. 

Pay  freight,  B.  &  O.,  $1.25. 

Cash  sales,  $84.25. 

3. 

Receive  from  Baltimore  Hardware  Co.,  check  for  $38.87  in  full  of  account. 

Sell  goods  on  account  as  follows: 

Edward  Steiner  &  Co.,  10  doz.  lathe  disc  sharpeners  at  $30  per  doz.,  1  doz.  Philadelphia  Lawn 
Sprinklers,  No.  6,  $24.76. 

J.  H.  Bowman  &  Co.,  1  gross  Acme  Nut  Crackers  at  $30,  20  doz.  knives  and  forks  at  $3.50 
per  doz.,  8  doz.  stove  polish  at  $5.75  per  doz.,  2  doz.  razors  at  $10.50  per  doz.,  4  doz.  spray  pumps 
at  $10  per  doz.,  6  doz.  pliers  at  $9  per  doz.,  3  doz.  Universal  Post  Hole  Diggers  at  $13  per  doz.,  1 
doz.  American  Meat  Cutters,  $120,  1  doz.  nail  pullers,  $5.48. 

J.  W.  Russell,  40  16-in.  Pastime  Lawn  Mowers,  $6.50  each,  1  doz.  lawn  sprinklers  $7.30. 

Send  check  to  National  Tool  &  Stamping  Co.,  in  full  of  account. 

Pay  gas  bill,  $8.75. 

Cash  sales,  $156.80. 

4. 

Receive  fron  Anderson  &  Ireland,  on  %,  108  shallow  well  pumps  at  $14  each,  1  Regulator  Pump, 
$25.90. 

Buy  from  New  England  Cutlery  Co.,  on  %,  100  doz.  butcher  knives  at  $3.75  per  doz.,  50 
doz.  W.  &.  B.  Razors  at  $10  per  doz.,  12  doz.  prs.  shears  at  $6  per  doz.,  1  doz.  prs.  nickle  plated 
shears  at  $9.37  per  doz.  . 

Receive  from  Miller  Hardware  Co.,  check  in  full  of  account. 

Receive  from  C.  C.  Pursey,  note  at  60  days,  dated  Oct.  2,  19     ,  for  $76.80  with  interest. 

George  Evans  draws  $38  on  account. 

Sell  to  J.  R.  M.  Adams,  40  scroll  saws  at  $10  each,  1  machine  lathe  at  $25.60. 

Sell  to  Young  Bros.,  on  %,  20  Merrill  Cross-cut  Saw  Sets  at  $30  per  set,  6  doz.  screen  doors 
at  $8.75  per  doz.,  1  doz.  scythes,  $5.90. 

Send  to  Anderson  &  Ireland,  check  for  $1,500. 

Send  to  Frank  B.  Sloan  &  Co.,  check  in  payment  of  note  and  interest  thereon. 

Cash  sales,  $68.58. 

5. 

Send  Francis  Albert  &  Co.,  check  in  full  of  account. 
Receive  check  from  M.  L.  Bauserman  for  $156.15. 
Receive  check  from  J.  H.  Bowman  &  Co.,  for  $100. 
Receive  check  from  A.  B.  Cochrane  &  Co.,  for  $210.46. 
Pay  salaries  at  follows:  Clerks,  $30;  Stenographer,  $10. 
Cash  sales,  $130.42. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      151 

7. 

Receive  the  following  invoices,  on  %, : 

From  National  Tool  &  Stamping  Co.,  100  gross  skate  sharpeners  at  $18  per  gross;  10  gross 
scythe  stones  at  $6.87 \  per  gross. 

Maryland  Hinge  Co.,  48  doz.  heavy  communicating  door  locks  at  $12  per  doz.,  5  doz.  push 
plates  at  $2.02  per  doz. 

Receive  checks  on  %  from 

Young  Bros.,  $329.53. 

Marshall,  Wescoat  &  Co.,  $468.75. 

Sell  goods  on  %,  as  follows: 

Miller  Hardware  Co.,  1  gross  skate  sharpeners  at  $20,  5  band  saws  at  $10  each,  1  saw  filer 
at  $30,  5  doz.  saw  sets  at  $6  per  doz.,  3  doz.  screen  doors  at  $11  per  doz.,  2  doz.  Jones'  Reversible 
Screw  Drivers  at  $13.50  per  doz.,  5  Barnes  Scroll  Saws,  No.  7,  at  $15  each,  $10  doz.  knives  and  forks 
at  $3.50  per  doz.,  2  doz.  heavy  communicating  door  locks  at  $13.20  per  doz. 

Frank  Beall  &  Co.,  100  10-lb.  cans  lubricating  graphite  at  $1.60  per  can,  1  doz.  hand  culti- 
vators $16.65. 

Baltimore  Hardware  Co.,  6  doz.  gate  hinges  at  $7.80  per  doz.,  10  doz.  harness  snaps  at  $1.50 
per  doz.,  2  doz.  cross-cut  saws  at  $16  per  doz.,  6  doz.  Black  Diamond  Scythe  Stones  at  $11  per 
doz.,  5  doz.  box  coffee  mills  at  $10  per  doz.,  3  doz.  Sampson  Cork  Screws  at  $10  per  doz.,  6  fodder 
compressors  at  $3  each,  10  doz.  corn  hooks  at  $3  per  doz.,  5  doz.  curry  combs  at  $10  per  doz.,  1 
doz.  egg  beaters  at  $4.20,  1  doz.  screen  doors  $10.17. 

Return  to  Anderson  &  Ireland  8  shallow  well  pumps  at  $14  each.  Our  order  called  for  only 
100  of  these  pumps. 

Cash  sales,  $235. 

Pay  for  office  desk  $75. 

draws  on  account,  $75. 

Student's  name 

Send  John  Sellers  $15,  and  James  Lower  $30  for  traveling  expenses. 

8. 

•  Buy  from  Frank  B.  Sloan  &  Co.,  on  %,  100  kegs  horse  shoes  at  $4  per  keg,  1,902  lbs.  horse 
shoe  nails  at  25^  per  lb. 

Send  to  William  H.  Cole  &  Son,  check  for  $334.62. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  10  doz.  lawn  sprinklers  at  $5.24  per  doz.,  5  doz.  Monarch 
Carpet  Sweepers  at  $20  per  doz.,  3  doz.  lawn  mowers  at  $70  per  doz.,  1  doz.  lawn  swings  at  $85 
per  doz.,  4  doz.  Giant  Nail  Nippers  at  $18  per  doz.,  1  gross  lemon  squeezers  at  $4.60. 

Sell  to  George  Yakel  &  Co.,  on  %,  5  doz.  ice  picks  at  $9  per  doz.,  6  doz.  Perfect  Oilers  at  $1.50 
per  doz.,  12  doz.  barn  door  latches  at  $2  per  doz.,  2  doz.  lathe  disc  sharpeners  at  $30  per  doz., 
2  doz.  mitre  boxes  at  $30  per  doz.,  2  doz.  No.  1  Giant  Nail  Pullers  at  $18  per  doz.,  1  gross  nail  sets 
at  $10,  2  doz.  Perfect  Vices  at  $24  per  doz.,  1  doz.  mechanics'  vises  at  $32,  1  doz.  kitchen  knives 
$1.78. 

Sell  to  J.  C.  Bailey,  3  doz.  lawn  mowers  at  $70  per  doz.,  1  doz.  bench  drills  at  $96,  5  doz. 
trimming  shears  at  $6  per  doz.,  7  doz.  box  scrapers  at  $6  per  doz.,  1  No.  5  saw  set  for  cross-cut 
saws  $30,  1  scroll  saw  $12,  1  doz.  Home  Meat  Cutters,  $28.75. 

Sell  to  Lindamuth  &  Co.,  on  %,  10  doz.  Star  Lemon  Squeezers  at  $2  per  doz.,  4  two  inch 
band  saws  at  $15  each,  10  Lester  Scroll  Saws  at  $10  each,  1  doz.  letter-box  plates  at  $7.43. 

Receive  from  Union  Hardware  Co.,  check  for  $209.55. 

Receive  from  Young  Bros,  check  in  payment  of  their  bill  of  the  4th  instant,  less  2%  for  cash 
in  10  days. 

Pay  drayage,  $2.75. 

Cash  sales,  $364.78. 


152        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

9. 

Send  check  to  Maryland  Hinge  Co.,  for  $550. 
Send  check  to  National  Tool  &  Stamping  Co.,  for  $1,000. 
Receive  from  Samuel  Emmert,  check  in  full  of  account. 
Receive  from  J.  R.  M.  Adams,  30  day  note  for  $671.35,  dated  Oct.  8th,  19—. 
Sell  to  Young  Bros.,  on  %,  2,000  lbs.  steam  packing  at  11^  per  lb.,  1  spray  pump  $15.60. 
Sell  to  Cumberland  Hardware  Co.,  12  doz.  Baldwin  Apple  Parers  at  $5  per  doz.,  1   doz. 
levels  at  $18.65. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  2  Regulator  Pumps  at  $23.40  each. 
Pay  for  stove,  $25.     (For  use  in  store.) 
Cash  sales,  $156.24. 

10. 


4th. 


Pay  New  England  Cutlery  Co.,  $1,338.97,  being  in  full  of  account  less  2%  on  our  bill  of  Oct. 

Buy  two  horses,  $300:  (Open  a  teams  account)  Wagon,  $125,  harness,  two  sets,  $45. 

A.  B.  Cochrane  renewed  his  note  due  this  day  for  60  days.     He  paid  the  interest  on  old  note. 

Pay  for  advertising  in  daily  papers,  $78.60. 

Cash  sales,  $165.37. 

11. 

Buy  from  William  H.  Cole  &  Son,  on  %  50 — 3£  inch  shallow  well  pumps  at  $15  each,    10  doz. 
wire  pliers  at  $9  per  doz.,  1  ton  sash  weights  $25.70. 

Buy  from  Francis  Albert  &  Co.,  on  %,  100  gross  U.  S.  Metal  Polish  at  $12  per  gross,  10  gross 
Gem  Stove  Polish  at  $4  per  gross. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  10  doz.  Universal  Post  Hole  Diggers  at  $13  per  doz., 
1  doz.  Champion  Post  Hole  Diggers  $5.60. 

Sell  to  J.  A.  Constantine,  on  %,  4  doz.  pruning  hooks  at  $14.10  per  doz. 

Sell  to  Frank  Beall  &  Co.,  on  %,  10  doz.  Anti-Friction  Pulleys  at  $12  per  doz.,  1  doz.  hay  fork 
pulleys  at  $5.35. 

Sell  to  Bailey  Bros.  &  Raub,  on  %,  \  doz.  machine  lathes,  $268.40. 

Receive  from  C.  C.  Pursey  &  Co.,  check  for  $524. 

Pay  for  electric  light  fixtures,  $160. 

Cash  sales,  $210.40. 

12. 

Pay  for  cleaning  windows,  $2. 

Pay  for  horse  feed,  $22.50. 

Pay  for  stable  rent, 


Pay  for  suit  of  clothes  for ,  $25. 

Student's  name 

Sell  to  Samuel  Emmert,  on  %,  5  doz.  try  squares  at  $9  per  doz.,  1  gross  skate  sharpeners  at 
I,  6  doz.  scythes  at  $6  per  doz.,  5  doz.  razors  at  $12  per  doz.,  1  gross  kraut  cutters  at  $25,  3 
doz.  cross-cut  saws  at  $18  per  doz.,  1  doz.  circular  saws  at  $60,  1  gross  flour  sifters  at  $10,  2  doz. 
mail  boxes  at  $12.75  per  doz.,  2  doz.  box  openers  at  $5  per  doz,  6  doz.  carpet  stretchers  at  $6 
per  doz.,  3  doz.  Bradley's  Drawing  Knives  at  $12.50  per  doz.,  1  doz.  Universal  Can  Openers  at  $3, 
5  doz.  solid  punches  at  $1.03  per  doz. 

Sell  to  Keystone  Hardware  Co.,  on  %,  4  deep  well  pumps  at  $17  each. 

Sell  to  M.  L.  Bauserman,  on  %,  2,000  lbs.  j  inch  rope  at  15|^  per  lb.,  500  lbs.  f  inch  sisal 
rope  at  10^  per  lb.,  1  gross  carpenters'  pencils  at  $4.25. 

Sell  to  J.  R.  Emerson  &  Co.,  on  %,  88  lbs.  oil  stones  at  50^  per  lb.,  2  doz.  pocket  oilers  at  91^. 

Pay  clerks'  salaries,  $30;  stenographer,  $10. 

Cash  sales,  $185.17. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.      153 

14. 

Have  J.  R.  M.  Adams'  note  of  Oct.  8th  discounted. 

Receive  from  M.  L.  Bauserman,  account  in  full  less  2%  discount  on  bill  of  Oct.  12. 

Receive  from  C.  S.  Pitcher  &  Co.,  check  for  $275.47. 

Receive  from  Cumberland  Hardware  Co.,  $50.  . 

Cash  sales,  $327.30. 

15. 

Buy  from  New  England  Cutlery  Co.,  on  %,  100  doz.  scythes  at  $8.60  per  doz.,  1  doz.  razors 
at  $12.75. 

Buy  from  Henry  Disston's  Sons,  on  %,  12  doz.  cross-cut  saws  at  $32  per  doz. 

Receive  from  J.  A.  Constantine,  check  for  $325. 

Receive  from  J.  C.  Bailey,  check  for  bill  of  8th  instant,  less  2%. 

Pay  our  note  of  Sept.  16th  in  favor  of  William  H.  Cole  &  Son  including  interest  on  same. 

Cash  sales,  $438.26. 

16. 

A.  E.  Trader  draws  $100  for  personal  use. 

Send  James  Lower  and  John  Sellers  each  $20  for  traveling  expenses. 

George  Evans  draws  on  account,  $30. 

Pay  for  painting  signs  on  front  of  store,  $25. 

Pay  for  shoeing  horses,  $2.50. 

Receive  from  Bailey  Bros.  &  Raub,  on  %,  check  for  $500. 

Sell  to  Oscar  Bear,  on  %,  6  doz.  Criterion  Saw  Sets  at  $6  per  doz.,  5  doz.  Marion  Roller  Bear- 
ing Carpet  Sweepers  at  $24  per  doz.,  2  doz.  Swan's  Drawing  Knives  at  $15  per  doz.,  3  black- 
smiths' upright  drills  at  $10  each,  1  doz.  small  hand  saws  at  $15.16. 

Sell  to  Union  Hardware  Co.,  on  %,  14  Disston's  Clamp  and  Guide  Saw  Sets  at  $30  per  set, 
1  Little  Giant  Horse  Mower  $25.60. 

Sell  to  S.  T.  Sampson,  Richville,  Pa.,  on  %,  20  sets  knives  and  forks  at  $3.20  per  set,  4  doz. 
Stillson  Pipe  Wrenches  at  $20  per  doz.,  3  doz.  engineers'  wrenches  at  $12  per  doz.,  20  Meyer's 
hay  unloaders  at  $7  each,  1  doz.  tack  pullers,  $4.32. 

Sell  to  A.  B.  Cochrane  &  Co.,  on  %,  1  doz.  platform  scales  at  $24,  6  Belt  Horse  Clipping 
Machines  at  $15  each,  6  large  coffee  mills  at  $7  each,  1  gross  egg  beaters  at  $4,  1  doz.  electric 
spiral  screw  drivers  at  $5.93. 

Cash  sales,  $342.84. 

At  this  point,  take  a  Trial  Balance. 

17. 

Pay  freight,  B.  &  O.  R.  R.,  $3.50. 

Pay  for  putting  in  tills,  $50. 

Pay  Miller  Safe  Co.,  for  safe,  $500. 

Pay  Henry  Disston's  Sons,  note  of  Sept.  18th. 

James  Lower  draws  for  personal  use,  $25. 

Receive  from  George  Yakel  Co.,  on  %,  note  at  60  days  for  $654.66. 

Receive  from  George  Keller,  on  %,  check  for  $450.02. 

Sell  to  J.  H.  Bowman  &  Co.,  on  %,  1  gross  flour  sifters  at  $11,  5  doz.  Marion  Carpet  Sweepers 
at  $24  per  doz.,  3  doz.  double  calipers  at  $4  per  doz.,  1  gross  Acme  Can  Openers  at  $6,  3  doz. 
Sampson  Cork  Screws  at  $10  per  doz.,  5  gross  tailors'  crayons  at  $5  per  gross,  1  doz.  drawing 
knives  at  $16,  1  gross  emery  scythe  stones  at  $13.72. 

Sell  to  J.  W.  Russell,  on  %,  1  gross  skate  sharpeners  at  $18,  6  doz.  egg  beaters  at  $6  per  doz., 
1,000  lbs.  1  in.  chain  at  $3.40  per  cwt.,  1  doz.  can  openers  at  $2,  1  doz.  engineers'  wrenches,  $33.45. 


154        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  to  Edward  Steiner  &  Co.,  on  %,  1  doz.  mail  boxes  at  $12.75, 3  doz.  Barber's  Ratchet  Braces 
at  $9  per  doz.,  2  doz.  Humason's  Box  Openers  at  $5  per  doz.,  5  doz.  butcher  knives  at  $3.75  per 
doz.,  2  doz.  carpet  stretchers  at  $6  per  doz.,  5  doz.  corn  knives  at  $1.50  per  doz.,  2  doz.  National 
Queen  Carpet  Sweepers  at  $28  per  doz.,  2  doz.  Yankee  Rat  Traps  at  $11.69  per  doz. 

Cash  sales,  $282.27. 

18. 

Pay expenses  to  New  York  and  return,  $65.     This  trip  was  made  in 

Student's  name 

the  interest  of  the  business. 

Receive  from  Miller  Hardware  Co.,  bank  draft  in  payment  of  bill  of  Oct.  7th,  less  2%  dis- 
count. 

Sell  to  J.  R.  M.  Adams,  on  %,  10  doz.  hammock  hooks  at  $1.25  per  doz.,  10  doz.  corn  hooks 
at  $3  per  doz.,  10  doz.  cotton  hooks  at  $1 .  25  per  doz.,  10  doz.  grass  hooks  at  $3  per  doz.,  25  kegs 
horse  shoes  at  $4  per  keg,  5  doz.  ice  picks  at  $9  per  doz.,  5  doz.  No.  2  nail  pullers  at  $4  per  doz., 
1  Little  Giant  Meat  Cutter,  No.  320,  at  $75.50. 

Sell  to  Young  Bros.,  on  %,  600  lbs.  Maude  S.  Horse  Nails  at  20^  per  lb.,  4  doz.  corn  knives  at 
$3  per  doz.,  1  keg  mule  shoes  at  $2.75. 

Sell  to  Dillon  &  Co.,  on  %,  1  gross  ice  picks  at  $25,  10-12  in.  Pastime  Lawn  Mowers  at  $6 
each,  1  doz.  Easy  Lawn  Swings  at  $90,  4  doz.  Matchless  Mop  Wringers  at  $12  per  doz.,  1  doz. 
nail  nippers  at  $2,  1  Little  Giant  Meat  Cutter,  No.  312,  $43.43. 

Pay  for  stationery  and  blank  books,  $28.50. 

Cash  sales,  $425.60. 

19. 

Edward  Steiner  &  Co.  accepted  our  draft  dated  Oct.  17th  for  $378.38,  due  10  days  after  date. 
Receive  from  Wilcox  Hardware  Co.,  on  %,  check  for  $250. 
Pay  Clerks'  salaries,  $30;  Stenographer,  $10. 
Pay  for  storm  doors,  $25. 
Cash  sales,  $110.34. 

21. 

Receive  from  S.  T.  Sampson,  check  for  his  bill  of  the  16th  instant,  less  2%  discount. 

Send  Maryland  Hinge  Co.,  on  %,  check  for  $500. 

Send  to  Frank  B.  Sloan  &  Co.,  on  %,  check  for  $700. 

Buy  from  Anderson  &  Ireland,  on  %,  10  doz.  Easy  Lawn  Swings  at  $84  per  doz.,  1  doz.  lawn 
sprinklers  at  $17.35. 

Sell  to  Miller  Supply  Co.,  on  %,  18  doz.  Matchless  Mop  Wringers  at  $12  per  doz.,  2  doz. 
nail  sets  at  $4.90  per  doz. 

Sell  to  George  Yakel  &  Co.,  on  %,  1,001  lbs.  Mystic  Anti-Friction  Metal  at  14^  per  lb.,  4  doz. 
melting  ladles  at  $4  per  doz. 

Sell  to  Baltimore  Hardware  Co.,  on  %,  2  gross  Gem  Nail  Nippers  at  $21  per  gsoss,  4  Amer- 
ican Meat  Cutters,  No.  4.  at  $25  each,  10  kegs  horse  shoes  at  $4  per  keg,  2  doz.  lathe  disc  sharp- 
eners at  $30  per  doz.,  1  doz.  razors  at  $10,  1  gross  nut  crackers,  $34.43. 

Cash  sales,  $365. 

22. 

John  Sellers  draws  $50  for  personal  use. 

Pay  livery  bill  of $5. 

Student's  name 

Received  check  from  J.  F.  Pearson  &  Co.,  on  %,  for  $400. 

We  discover  an  overcharge  of  $10  in  Anderson  &  Ireland's  bill  of  the  21st  instant.  The  charge 
for  this  lot  of  lawn  swings  should  have  been  $83  per  doz.  We  notify  them  of  the  error  and  make 
the  proper  entry  on  our  books. 

Received  from  J.  W.  Russell,  on  %,  his  note  at  60  days  for  $426.27,  dated  Oct.  21,  19  ,  with 
interest  at  6%. 

Cash  sales,  $217.68. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE       155 

23. 

Send  James  Lower  and  John  Sellers  $15  each  for  traveling  expenses. 

Send  to  National  Tool  &  Stamping  Co.,  on  %,  $868.75. 

Send  to  Henry  Disston's  Sons,  on  %,  $850. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  5  doz.  National  Nail  Pullers  at  $20  per  doz.,  5  deep  well 
pumps  at  $20  each,  1  doz.  Lightning  Nail  Pullers  at  $18.73. 

Sell  to  Miller  Hardware  Co.,  on  %,  2  doz.  store  door  handles  at  $15  per  doz.,  4  doz.  push 
plates  at  $5  per  doz.,  10  American  Meat  Cutters,  No.  1,  at  $5  each,  1  gross  hooks  at  $2.60. 

Sell  to  M.  L.  Bauserman,  on  %,  6  doz.  Perfect  Oilers  at  $1.50  per  doz.,  2  Leavey's  Mitre  Boxes 
at  $30  each,  6  doz.  Matchless  Mop  Wringers  at  $12  per  doz.,  6  coffee  mill  motors  at  $5  each,  100 
lbs.  No.  3  Washita  Oil  Stones  at  70^  per  lb.,  3  doz.  Lightning  Nail  Pullers  at  $18  per  doz.,  14  qt. 
lard  and  cheese  press,  at  $5,  20  Pastime  Lawn  Mowers  at  $6  each,  1  doz.  Daisy  Lawn  Sprinklers  at 
$8.70. 

Receive  from  Baltimore  Hardware  Co.,  on  %,  check  for  $352.17. 

Receive  from  J.  H.  Bowman  &  Co.,  on  %,  $300. 

Cash  sales,  $310.24. 

24. 

Sell  to  J.  W.  Russell,  on  %,  50  cheese  presses  at  $4  each,  1  American  Meat  Cutter  at  $15.23. 

Sell  to  George  Keller,  on  %,  1  gross  ice  picks  at  $9,  10  doz.  ventilator  cords  at  $7.50  per  doz., 
5  doz.  bicycle  locks  at  $9  per  doz.,  1  gross  fly  traps  at  $12,  100  transom  lifters  at  $13  per  C,  1 
doz.  Combination  Pipe  Vises  at  $60,  5  doz.  plastering  trowels  at  $9  per  doz.,  3  doz.  Stillson 
Pipe  Wrenches  at  $20  per  doz.,  1  doz.  Little  Giant  Bench  Vises  at  $36,  2  gross  Single  Rat  Killers, 
No.  2,  at  $15  per  gross,  1  doz.  Lane's  Self  Measuring  faucets  at  $41.80. 

Sell  to  S.  T.  Sampson,  on  %,  12  sausage  stuff ers  at  $30  each,  5  doz.  razors  at  $10  per  doz., 
5  doz.  serrated  hay  knives  at  $10  per  doz.,  1  doz.  hedge  trimmers  at  $8,  1  doz.  post  hole  diggers, 
Atlas  pattern,  $7.54. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  200  lbs.  \  in.  cotton  rope  at  15^  per  lb.,  500  lbs.  \  in. 
manilla  rope  at  12^  per  lb.,  400  lbs.j  in.  manilla  rope  at  12^  per  lb.,  800  lbs.  f  in.  sisal  rope  at 
10^  per  lb.,  1  doz.  ivory  rules  at  $10.26. 
•     Send  check  to  Francis  Albert  &  Co.,  on  %,  for  $1,000. 

Receive  from  F.  H.  Davidson  &  Co.,  on  %,  $346.84. 

Pay  for  advertising,  $50. 

Cash  sales,  $560.32. 

25. 

George  Keller  pays  his  note  of  Sept.  25th. 

Buy  from  National  Tool  &  Stamping  Co.,  on  %,  50  windmill  pumps  at  $15  each,  1  lift  pump, 
$8.50. 

Receive  from  Dillon  &  Co.,  on  %,  check  for  $300. 

Receive  from  Baltimore  Hardware  Co.,  check  in  payment  of  their  bill  of  the  21st  instant, 
less  2%  discount. 

Buy  from  Francis  Albert  &  Co.,  on  %,  100  doz.  Perfection  Post  Hole  Augurs,  at  $8  per  doz., 
100  doz.  Little  Jack  Tack  Pullers  at  $1.20  per  doz.,  2  doz.  lawn  rakes  at  $3.40  per  doz. 

Buy  from  Henry  Disston's  Sons,  on  %,  100  hand  saws  at  $5.32  each. 

Cash  sales,  $121.63. 

26. 

Send  check  to  New  England  Cutlery  Co.  in  payment  of  our  hill  of  the  15th  instant,  less  2% 
discount. 

Pay  freight,  P.  R.  R.,  $2. 

Pay  Clerks,  $30;  Stenographer,  $10. 


156         MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Pay  Driver  two  weeks'  wages, 
draws  SI 00  on  account. 

Student's  name 

Contribute  to  the  Charity  Organization  Society,  $100. 

J.  W.  Russell  returns  to  us  25  cheese  presses  at  $4  each  because  they  were  not  like  the  sample 
shown  him. 

Cash  sales,  $72.45. 

28. 

J.  C.  Bailey  pays  his  note  of  Sept.  27th. 

Receive  from  Edward  Steiner  &  Co.,  check  in  payment  of  their  acceptance  due  tomorrow. 

Sell  to  Union  Hardware  Co.,  on  %,  10  windmill  pumps  at  $17  each,  1  lift  pump  $6.45. 

Sell  to  J.  C.  Bailey,  on  %,  1,000  lbs.  ^6  m-  Manilla  rope  at  12^  per  lb.,  1  gross  prs.  spring 
hinges,  No.  18,  at  $18,  10  doz.  reversible  gate  hinges  at  $5  per  doz.,  12  Sure  Grip  Hay  Unloaders 
at  $10  each,  1  oak  cabinet,  No.  1658,  at  $52,  2  spray  pumps  at  $11.07  each. 

George  Evans  draws  $20  on  account. 

James  Lower  draws  $20  on  account. 

Cash  sales,  $124.92. 

29. 

Send  check  to  Francis  Albert  &  Co.,  in  payment  of  their  bill  of  the  25th  instant,  less  2% 
discount. 

Pay  for  postage  stamps,  $10. 

A.  E.  Trader  draws  $150  on  account. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  30  band  saws  at  $7  each,  1  gross  box  scrapers  $26.84. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  10  doz.  hand  saws  at  $14.56  per  doz. 

Sell  to  Bailey  Bros.  &  Raub,  on  %,  40  doz.  knives  and  forks  "Anchor"  brand,  at  $3.25  per 
doz.,  10  doz.  hatchets  at  $6.30  per  doz.,  12  Meyer's  Hay  Unloaders  at  $7  each,  4  Sure  Grip  Hay 
Unloaders  at  $12  each. 

Sell  to  Z.  L.  Smith,  Bluefield,  W.  Va.,  on  %,  10  doz.  scythes  at  $5.80  per  doz.,  12  doz.  Amer- 
ican Files  at  $5  per  doz.,  6  forges  at  $12  each,  10  doz.  hammers  at  $6  per  doz.,  2  doz.  Osborne  Hand 
Cultivators  at  $15  per  doz.,  10  Cable  Hay  Unloaders  at  $7  each,  2  oak  cabinets,  No.  B — 438,  at  $30 
each,  2  gross  auger  handles  at  $3.80  per  gross,  1  doz.  sidewalk  scrapers  at  $2.65. 

Cash  sales,  $235.17. 

30. 

Buy  from  Maryland  Hinge  Co.,  on  %,  75  doz.  screen  doors  at  $10  per  doz.,  1  doz.  prs.  gate 
hinges  at  $9.45. 

Pay  for  inspecting  elevator,  $1.75. 

F.  H.  Davidson  &  Co.,  return  merchandise  amounting  to  $25,  which  was  not  satisfactory. 
Give  them  credit. 

Send  James  Lower  and  John  Sellers  $15  each  for  traveling  expenses. 

Pay  subscription  to  Baltimore  Sun,  $3. 

Cash  sales,  $45.50. 

31. 

Buy  from  Frank  B.  Sloan  &  Co.,  on  %,  48  doz.  National  Queen  Carpet  Sweepers  at  $25  per 
doz.,  1  doz.  Monarch  Carpet  Sweepers  $30.70. 

Sell  Miller  Supply  Co.,  on  %,  1  gross  mouse  traps  at  $25.63. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  1  gross  weed  eradicators  at  $10.46. 

Credit  salesmen,  bookkeeper,  and with  their  salaries. 

Student's  name 

Take  a  trial  balance  and  close  the  ledger. 

Compare  your  Bill  Book  with  the  Bills  Receivable  and  Bills  Payable  accounts  in  your  Ledger. 
In  case  they  do  not  agree,  you  must  make  all  necessary  corrections  before  proceeding  further. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         157 

Inventories  for  closing  the  books : 

Merchandise $11,845.00 

Store  and  Office  Fixtures 1,400.00 

Teams 450. 00 

Unexpired  Insurance 50. 00 

WRITTEN  TEST  NO.  12. 

1.  What  is  a  co-partnership;  a  partnership? 

2.  How  formed?     Why  formed?     By  how  many  persons? 

3.  How  long  may  a  partnership  exist? 

4.  What  is  a  partnership  agreement? 

5.  What  do  you  mean  by  the  net  investment  of  each  partner? 

6.  Why  is  each  given  a  separate  account? 

7.  Your  present  worth  is  $6482,  you  have  gained  $2100  during  the  past  year.  Draw  up 
your  Capital  account  showing  how  it  stood  at  the  beginning  of  the  year;  also  show  in  it,  your  Net 
Gain  and  Present  Worth,  all  properly  arranged. 

8.  How  often  in  business  should  a  Trial  Balance  be  taken?    Why? 

9.  How  often  should  the  books  of  original  entry  be  posted?     Closed? 

10.  How  often  in  business  is  the  Ledger  closed? 

11.  For  what  purpose  is  the  Ledger  closed? 

12.  What  is  meant  by  taking  stock?    How  valued? 

13.  What  is  a  pre-inventory  sale;  clearance  sale? 

14.  What  is  a  Continuous  Trial  Balance?    Describe  it.     What  is  gained  by  its  use? 

15.  When  is  the  best  time  to  check  the  posting?    Why? 

16.  Why  is  it  necessary  to  place  a  check  mark  beside  each  item  examined? 

17.  Name  five  errors  that  will  affect  the  equality  of  the  Ledger? 

18.  How  will  each  affect  it  and  how  should  each  be  corrected? 

19.  What  is  a  monthly  statement  of  account?    For  what  purpose  used? 

20.  What  is  a  general  Statement?    An  Itemized  Statement?    Explain  and  draw  up  forms. 

21.  If  your  Trial  Balance  is  out  to  the  extent  of  $18,  what  will  be  your  first  step? 

22.  If  your  Trial  Balance  columns  show  a  difference  of  198,  what  would  you  advise? 

23.  Why  is  it  a  good  plan  to  perform  the  lead  pencil  work  right  in  the  Ledger? 

24.  What  is  gained  by  drawing  single  red  lines  in  personal  accounts,  when  payments  just 
made  balance  certain  amounts  on  the  opposite  side  of  the  account? 

TRADE  DISCOUNTS. 

181.  In  some  businesses  price  lists  or  catalogues  are  issued  containing  prices  from  which  the 
manufacturer  or  dealer  means  to  allow  the  purchaser  a  discount  or  a  series  of  discounts.  These 
discounts  are  known  as  Trade  Discounts.  One  of  the  advantages  of  this  method  of  doing  busi- 
ness is  that  fluctuations  in  prices  can  be  easily  taken  care  of  by  changing  the  discount  or  series 
of  discounts  allowed,  thus  avoiding  the  expense  of  printing  new  price  lists  or  catalogues.  Another 
advantage  is  that  the  retailer  can  freely  show  his  prospective  customer  the  manufacturer's  illus- 
tration and  description  of  an  article  that  is  being  considered,  without  the  prospective  customer 
getting  any  information  as  to  what  the  dealer  will  have  to  pay  for  the  article. 

182.  Dealers  issuing  a  price  list  from  which  a  trade  discount  is  allowed,  do  not  always  allow 
a  uniform  discount.  Usually  purchasers  of  large  quantities  of  goods  are  allowed  more  liberal 
discounts  than  customers  who  buy  smaller  quantities,  and  sometimes  the  intensity  of  competition 
in  a  given  line  in  a  certain  part  of  the  country  will  lead  to  the  giving  of  a  larger  trade  discount  in 
that  section  of  the  country  than  is  offered  elsewhere. 


158        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

183.  In  charging  and  billing  when  a  trade  discount  is  allowed,  it  is  customary  to  figure  out 
the  price  of  each  item  on  the  bill  at  list  price  and  then  take  off  the  trade  discount.  For  instance, 
if  part  of  a  bill  of  goods  consisted  of  one  dozen  electric  irons,  list  price  $8  each,  subject  to  a  trade 
discount  of  30%,  20%  and  12$%,  this  item  of  the  bill  would  be  figured  thus,— $12  X  $8  is  $96, 
which  less  30%  is  $67.20,  which  less  20%  is  $53.76,  which  less  12$%  is  $47.04,  the  real  selling  price 
per  dozen  of  the  irons.  Goods  sold  subject  to  a  Trade  Discount  are  usually  also  subject  to  a  Cash 
Discount  and  the  student  must  not  get  the  Trade  Discount  and  the  Cash  Discount  confused. 
For  information  about  Cash  Discount,  see  article  109. 

184.  The  bookkeeper  or  bill  clerk  who  has  much  trade  discount  to  figure  will  soon  learn 
that  discounts  of  16f  and  10%  equal  a  single  discount  of  25%;  discounts  of  25%  and  20%  equal 
a  single  discount  of  40%;  discounts  of  33$%  and  10%  equal  40%;  and  discounts  of  33%  and  25% 
equal  50%. 

SET  5. 

WHOLESALE  HARDWARE  BUSINESS  CONTINUED — PARTNER  ADMITTED. 

REAL  ESTATE  AND  MACHINERY  ACCOUNTS. 

185.  Taxes  and  ordinary  repairs  consituting  the  maintenance  or  up-keep  of  our  property, 
should  be  charged  to  expense  or  some  equivalent  account  and  not  to  the  Real  Estate  account, 
because  the  debit  balance  of  our  Real  Estate  account  is  supposed  to  show  what  our  Real  Estate 
is  worth  and  taxes  and  ordinary  repairs  do  not  increase  the  value  of  our  property  but  are  a  neces- 
sary expense  or  outlay  in  order  to  keep  our  property  from  depreciating  in  value. 

186.  If  we  build  an  addition  to  our  building  or  go  to  some  expense  which  makes  our  property 
permanently  more  valuable  than  it  was  before,  it  will  be  proper  to  charge  the  money  expended 
in  this  way  to  our  Real  Estate  account  because  that  increases  the  value  of  the  property. 

187.  In  a  business  in  which  machinery  is  used,  there  is  usually  a  Machinery  account  and  it 
is  treated  similarly  to  the  Real  Estate  account  as  described  above.  Money  spent  for  repairs  to 
machinery  or  for  the  replacing  of  broken  or  worn  out  parts,  is  charged  to  Expense  or  some  equiv- 
alent account,  say,  for  instance,  to  an  account  called  " Machinery  Repairs"  or  "Machinery  Main- 
tenance," which  would  show  a  loss  when  closed  into  the  Loss  and  Gain  account  at  the  end  of  the 
business  period,  but  if  machinery  is  bought  to  equip  an  addition  to  the  factory,  it  is  proper  to 
charge  this  to  the  Machinery  account  because  it  does  increase  the  value  of  the  machinery  equip- 
ment instead  of  simply  maintaining  the  original  equipment  at  its  first  standard  of  efficiency. 

NOV.  1. 

Receive  B.  F.  Partner,  this  day,  as  a  member  of  the  firm.  He  invests  cash,  $10,000.  The 
firm  will  be  known  hereafter  as ,  Trader  k  Co.     Gains  and  Losses  are 

Student's  name 

to  be  shared  in  proportion  to  the  investment.     is  to  be  paid  a  salary 

Student's  name 

of  $85  a  month  for  managing  the  business.     Partnership  to  run  for  five  years.     Draw  up  a  new 
partnership  agreement. 

Purchase  the  building  in  which  your  business  has  been  conducted,  for  $12,000,  in  fee,  and 
give  your  check  in  payment  of  same.     (Open  a  Real  Estate  Account.) 

2. 

Pay  Clerks,  $30;  Stenographer,  $10;  Driver,  $10. 
James  Lower  draws  $15  on  account. 
John  Sellers  draws  $48  on  account. 
George  Evans  draws  $30  on  account. 

Buy  from  Mann  Axe  Co.,  Lewistown^  Pa.,  on  %,  50  doz.  axes,  list  price  $21.68,  less  discounts 
10-20-20,  1  doz.  small  hatchets,  list  price  $5.13  less  discounts  10-10-10. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         159 

Receive  from  Oscar  Bear,  on  %,  check  for  $300. 

Receive  from  M.  L.  Bauserman  payment  of  his  bill  of  the  23rd  ult.,  less  2%  discount. 

Send  Anderson  &  Ireland  check  in  payment  of  our  account  to  date. 

Cash  sales,  $226.30. 

4. 

Pay  for  repairs  to  wagon,  $4.50. 

Have  George  Yakel  &  Co.'s  note,  dated  Oct.  17th,  discounted. 

Sell  to  Lindamuth  &  Co.,  on  %,  10,000  sq.  ft.  wire  netting  at  $1.25  per  hundred  sq.  ft.,  70 
doz.  wire  stretchers  at  $1.50  per  doz.,  1  doz.  vegetable  slicers  at  $15.30. 

Receive  from  J.  W.  Russell,  check  in  payment  of  his  bill  of  the  24th  ult.,  less  2%  discount. 

Sell  to  S.  T.  Sampson,  on  %,  10  doz.  plastering  trowels  at  $9  per  doz.,  2  doz.  self  measuring 
faucets  at  $36  per  doz.,  100  1  lb.  cans  of  graphite  at  20^  per  can,  3  doz.  No.  5,  frying  pans  at  $6 
per  doz.,  6  doz.  planters'  hoes  at  $10  per  doz.,  6  doz.  farriers'  knives  at  $3  per  doz.,  5  doz.  malle- 
able rakes  at  $6  per  doz.,  6  doz.  hay  fork  pulleys  at  $6  per  doz.,  1  doz.  Disston's  pruning  hooks 
at  $12,  8  doz.  3  oz.  boxes  U.  S.  Metal  Polish  at  50^  a  doz.,  2  doz.  Harper  Fly  Traps  at  $13.36  per 
doz. 

Sell  to  Marshall,  Wescoat  &  Co.,  on  %,  5  doz.  Perfect  Vises  at  $24  per  doz.,  1  doz.  Phoenix 
Window  Cleaners  at  $3.54,  6  doz.  Electric  Razors  at  $10  per  doz.,  1  ton  sash  weights  at  $25,  1  No. 
4,  sausage  stuff er  at  $30,  1  doz.  Reading  Apple  Parers  at  $4. 

Cash  sales,  $125.37. 

5. 

Return  to  Mann  Axe  Co.,  axes  to  the  value  of  $75,  which  were  not  as  per  order. 
Buy  from  C.  A.  Starrell  &  Co.,  Chicago,  111.,  on  %,  100  doz.  hand  vises,  list  price  $20.42  per 
doz.  less  discount  25-25-25. 

Pay  taxes  on  property,  $81.     (Open  a  tax  account.) 

Receive  from  Union  Hardware  Co.,  their  note  at  30  days  for  $176.45,  dated  Nov.  4th,  19 — . 

Pay  freight,  B.  &  O.  R.  R.,  $4.50. 

Cash  sales,  $256.32. 

6. 

Receive  from  J.  F.  Pearson  &  Co.  payment  of  their  note  of  Sept.  7th,  19 — . 

Receive  our  draft  at  10  days  for  $302,  on  Frank  Beall  &  Co.,  which  was  accepted  on  the  5th 
instant. 

Sell  to  Samuel  Emmert,  on  %,  8  doz.  hand  vises  at  $10  per  doz.,  1  doz.  garden  trowels  $4.23, 
4  deep  well  pumps,  No.  83,  at  $25  each. 

Sell  George  Yakel  &  Co.,  on  %,  5  doz.  engineers'  wrenches  at  $23  per  doz.,  1  doz.  Victor 
Potato  Parers  at  $60,  3-3|  in.  shallow  well  pumps  at  $17  each,  40  lbs.  Hindostan  Oil  Stones  at 
10(£  per  lb.,  1  doz.  bicycle  wrenches  at  $4.86. 

Sell  to  J.  H.  Constantine,  on  %,  10  doz.  mail  boxes  at  $12.75,  per  doz. 

Cash  sales,  $72.45. 

7. 

Receive  from  J.  R.  Emerson  &  Co.,  on  %,  bank  draft  for  $175. 
Pay  for  thousand  mile  ticket  on  B.  &  O.  R.  R.  for  Jas.  Lower,  $20. 
Send  John  Sellers  $15  for  traveling  expenses. 

Buy  from  New  England  Cutlery  Co.,  on  %,  100  doz.  drawing  knives,  list  price  $24.40  less 
discounts  20-20-20. 

Receive  from  Young  Bros.,  on  %,  check  for  $235.60.  , 

Cash  sales,  $145.72. 


160        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

8. 
draws  $125  on  account. 


Student's  name 

Pay  for  putting  in  elevator,  $535. 

Sell  to  J.  W.  Russell,  on  %,  2  doz.  bench  drills  at  $25  per  doz.,  3  doz.  Family  Apple  Parers 
at  $15  per  doz.,  5  doz.  Vaughan's  Post  Hole  Diggers  at  $9  per  doz.,  4  doz.  Crank's  No.  20  Pliers  at 
$9  per  doz.,  6  doz.  iron  planes  at  $5  per  doz.,  1  gross  2  qt.  corn  poppers  at  $10.50  per  gross,  4  doz. 
Perfection  Post  Hole  Diggers  at  $8  per  doz. 

SelltoM.L.Bauserman,on  %,  10  doz.  butcher  knives  at  $3.70  per  doz.,  6  doz.  heavy  communi- 
cating door  locks  at  $12  per  doz.,  1  gross  skate  sharpeners  at  $18  per  gross,  5  doz.  hand  saws  at 
$18  per  doz.,  5  doz.  Marion  Carpet  Sweepers  at  $24  per  doz.,  3  doz.  Criterion  Saw  Sets  at  $6  per 
doz.,  5  doz.  knives  and  forks  (Holmes  &  Edwards)  at  $3  per  doz.,  2  doz.  door  springs  at  $2.71  per 
doz. 

Sell  to  Keystone  Hardware  Co.,  on  %,  4  doz.  egg  beaters  at  $6  per  doz.,  1  doz.  wing  calipers 
at  $7.65,  6  doz.  electric  spiral  screw  drivers  at  $6  per  doz.,  4  doz.  fancy  screen  doors  at  $10.50 
per  doz.,  5  doz.  Columbia  Tack  Pullers  at  $5  per  doz.,  10  doz.  "  1847"  knives  and  forks  at  $3.50 
per  doz.,  1  doz.  Taintor's  Positive  Saw  Sets  at  $18. 

Sell  to  J.  R.  M.  Adams,  on  %,  10  doz.  butcher  knives  at  $3.70  per  doz.,  5  doz.  Barber's 
Ratchet  Braces  at  $9  per  doz.,  6  doz.  box  openers  at  $5  per  doz.,  2  doz.  Marion  Carpet  Sweepers  at 
$24  per  doz.,  3  American  Meat  Cutters,  No.  4,  at  $25  each,  \  gross  Hunter's  Nail  Sets  at  $10  per 
gross,  1  doz.  curry  combs  at  $6.83. 

Pay  for  advertising,  $25. 

Z.  L.  Smith  having  refused  to  accept  our  30-day  draft  and  having  written  that  he  does  not  ex- 
pect to  be  in  a  position  to  pay  our  bill  for  at  least  six  months,  we  place  his  account  in  the  hands 
of  our  attorney,  Robert  E.  Traverse  for  collection.     Open  an  account  with  the  attorney. 

Cash  sales,  $128.72. 

9. 

Buy  from  Anderson  &  Ireland,  on  %,  90  doz.  mail  boxes,  list  price  $80.00  per  doz.  less  dis- 
counts 50-50-50,  18  gross  can  openers,  list  price  $4.72  per  gross  less  discounts  25-25-25,  1  doz. 
brooms,  list  price  $15.29  per  doz.  less  discounts  12|-12|-12|. 

Buy  from  William  H.  Cole  &  Son,  on  %,  70  doz.  Sampson  Cork  Screws  at  $10  per  doz.,  16 
doz.  box  openers  at  $5.20  per  doz. 

Receive  from  George  Yakel  &  Co.,  on  %,  check  for  $156.14. 

Receive  from  Central  Pa.  Supply  Co.,  on  %,  $250. 

Sell  to  Young  Bros.,  on  %,  4  doz.  Gem  Nail  Pullers  at  $12  per  doz.,  2  doz.  Leavey's  Mitre 
Boxes  at  $30  per  doz.,  6  coffee  mill  motors  at  $5  each,  10  4-qt.  lard  presses  at  $4  each,  2  doz.  lathe 
disc  sharpeners  at  $30  per  doz.,  1  doz.  Dew  Drop  Lawn  Sprinklers  at  $2,  1  doz.  Enterprise  Meat 
Cutters,  No.  10,  at  $35. 

Sell  to  C.  S.  Pitcher  &  Co.,  on  %,  5  doz.  Electric  Razors  at  $10.50  per  doz.,  8  doz.  brass  kettles 
at  $7  per  doz.,  6  doz.  chopping  knives  at  $4  per  doz.,  4  doz.  carving  knife  hones  at  $2.50  per  doz., 
300  lbs.,  Defender  Anti-friction  Metal  at  18^  per  lb.,  4  doz.  Matchless  Mop  Wringers  at  $12  per  doz., 
8  doz.  steel  measuring  tapes  at  $8  per  doz.,  1  doz.  tinned  trowels  at  $6.50,  1  doz.  combination 
pruning  shears  at  $13.30  per  doz. 

Sell  to  Cumberland  Hardware  Co.,  on  %,  10  doz.  spring  punches  at  $1.70  per  doz.,  500  Pay- 
son's  Transom  Lifters  at  $13  per  C,  3  doz.  auto  wagon  jacks  at  $25  per  doz.,  2  doz.  washer  cutters 
at  $6.50  per  doz.,  1  spray  pump  at  $2.45. 

Sell  to  A.  B.  Cochrane  &  Co.,  on  %,  5  doz.  Ryan's  Post  Hole  Diggers  at  $20  per  doz.,  5  doz. 
StiHson  Pipe  Wrenches  at  $20  per  doz.,  6  doz.  serrated  hay  knives  at  $10  per  doz.,  10  doz.  Wads- 
worth's  No.  2  Hedge  Trimmers  at  $6  per  doz.,  1  gross  carpenters'  pencils  at  $4.80. 

Sell  to  Dillon  &  Co.,  on  %,  10  doz.  razors  at  $10  per  doz.,  5  doz.  lawn  rakes  at  $4.03  per  doz. 

Pay  salaries  for  the  week,  Clerks,  $30;  Stenographer  $10;  Driver  $10. 

Pay  note  of  Sept.  10  favor  of  Francis  Albert  &  Co. 

Cash  sales,  $234.27. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        161 

11. 

Pay  freight,  P.  R.  R.,  $6.25. 

We  discover  an  error  in  the  shipment  received  from  Anderson  &  Ireland  on  the  9th  instant. 
Instead  of  90  doz.  mail  boxes  we  received  only  89  doz.  Make  an  entry  for  the  amount  of  the  error 
and  notify  Anderson  &  Ireland. 

Pay  the  bill  of  Mann  Axe  Co.,  of  the  2nd  instant,  less  2%  discount. 

Receive  from  Samuel  Emmert,  on  %,  his  note  at  30  days  for  $425.15  dated  Nov.  9th,  19 — , 
with  interest  at  6%. 

Receive  from  Miller  Supply  Co.,  on  %,  check  for  $300. 

Cash  sales,  $125.30. 

12. 

Central  Pa.  Supply  Co.  pay  the  interest  on,  and  renew  their  note  of  Sept.  13th,  giving  a  new 
note  due  in  30  days  from  date. 

Sell  to  J.  R.  Emerson  &  Co.,  on  %,  20  Knapsack  Spray  Pumps  at  $10  each,  2  gross  metal 
polish  at  $12  per  gross,  1  doz.  wire  pliers  at  $10.61. 

Sell  to  J.  H.  Bowman  &  Co.,  on  %,  10  doz.  Disston's  Combination  Pruning  Hooks  at  $18  per 
doz.,  1  doz.  apple  parers  at  $4.25. 

Sell  to  Oscar  Bear,  on  %,  1  gross  razors,  $120,  1  doz.  corn  poppers  (2  qt.)  $1.15,  1  doz.  hay 
fork  pulleys  at  $4. 

Pay  for  new  roof  on  store,  $225. 

Pay  for  gas  bill  in  A.  E.  Trader's  private  residence,  $12.50. 

B.  F.  Partner  draws  $50  for  personal  use. 

Cash  sales,  $78.20. 

13. 

Receive  from  M.  L.  Bauserman,  check  in  payment  of  his  bill  of  the  8th  instant,  less  2% 
discount. 

Receive  from  Lindamuth  &  Co.,  on  %,  check  for  $325. 

S.  T.  Sampson  has  failed.  Accept  45^  on  the  dollar  in  settlement  of  his  indebtedness. 
(Open  a  Lost  Accounts  and  Notes  Account,  which  account  is  debited  for  the  amount  of  loss 
sustained.  Some  persons  would  charge  this  to  the  Loss  and  Gain  account,  but  you  prefer  to  make 
no  entries  to  that  account  until  you  close  your  books.  The  final  result,  of  course,  is  the  same  in 
either  case.) 

Marshall,  Wescoat  &  Co.  pay  their  note  of  Sept.  19th  which  has  yet  35  days  to  run.  In 
making  remittance,  they  deduct  interest  for  that  time. 

Cash  sales,  $342.62. 

14. 

Send  John  Sellers  $15  for  traveling  expenses. 

Send  Maryland  Hinge  Co.,  on  %,  check  for  $700. 

Buy  from  Francis  Albert  &  Co.,  on  %,  36  doz.  Positive  Saw  Sets  at  $18  per  doz.,  20  doz.  bench 
screws  at  $3  per  doz.,  1  gross  scythe  stones  at  $7.30. 

Buy  from  National  Tool  &  Stamping  Co.,  on  %,  45  doz.  engineers'  wrenches  at  $20  per  doz., 
1  doz.  Stillson  Wrenches  at  $24.85. 

Buy  from  Frank  B.  Sloan  &  Co.,  on  %,  60  doz.  ratchet  braces  at  $8.90  per  doz.,  1  set  of  wood 
chisels  at  $6.50. 

Buy  feed  for  horses,  $17.25. 

George  Evans  draws,  on  %,  $40. 

J.  W.  Russell  returns  goods  amounting  to  $15.45  from  his  bill  of  the  8th  instant,  which  he 
claims  were  not  as  represented  by  our  salesman.  He  remits  at  the  same  time  for  his  bill,  less 
2%  discount. 

Cash  sales,  $123.46. 


162        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

15. 

Send  to  C.  A.  Starrell  &  Co.,  bank  draft  in  payment  of  their  bill  of  the  5th  instant,  less  freight 
allowance,  $1.25  and  2\%  discount. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  8  doz.  Keystone  Egg  Beaters  at  $6  per  doz.,  10  doz.  hatchets 
at  $6.30  per  doz.,  4  Meyer's  Hay  Unloaders  at  $7  each,  1  low  down  tank  pump  at  $5,  2  doz.  box 
openers  at  $6.10  per  doz. 

Sell  to  Miller  Hardware  Co.,  on  %,  10  gross  tailors'  blue  crayons  at  $9  per  gross,  2  doz. 
Enterprise  Self  Measuring  Faucets  at  $36  per  doz.,  10  doz.  hedge  trimmers  at  $8  per  doz.,  4  Meyer's 
Hay  Unloaders  at  $7  each,  1  doz.  can  openers  at  $5.40. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  3,178.7  lbs.  f  inch  chain  at  $4  per  cwt. 

Sell  to  George  Keller,  on  %,  2  doz.  spiral  egg  beaters  at  $4.25  per  doz.,  10  doz.  cherry  stoners 
at  $5  per  doz.,  5  doz.  frying  pans,  No.  7,  at  $8  per  doz.,  5  doz.  prs.  McKinney's  Parn  Door  Hangers 
at  $18  per  doz.,  4  doz.  Osborne's  Hand  Cultivators  at  $15  per  doz. 

Receive  from  Marshall,  Westcoat  &  Co.,  on  %,  check  for  $380.92. 

Pay  freight,  P.  R.  R.,  $4.25. 

Cash  sales,  $234.17. 

Take  a  Trial  Balance  at  this  point  and  submit  same  for  approval. 

188.  At  this  point  the  teacher  may  direct  the  student  where  to  procure  the  cash  on  hand 
and  a  packet  containing  the  daily  cash  receipts.  At  the  close  of  business  each  day  the  student 
shall  deposit  in  the  College  Bank  all  funds  on  hand  in  excess  of  $100,  this  sum  to  be  retained  in 
the  cash  drawer  to  make  change  and  pay  employees.  Employees  drawing  less  than  $50  at  a  time 
may  be  paid  in  cash;  all  other  payments  shall  be  made  by  check.  For  the  convenience  of  your 
employees  you  may  enclose  the  sum  you  wish  to  pay  each  of  them  in  an  addressed  envelope  and 
leave  same  at  the  bank  for  the  employee  to  receive  when  he  calls  for  it. 

Make  out  all  out-going  papers. 

16. 

Pay  salaries,  Clerks  $30;  Stenographer  $10;  Driver  $10. 

James  Lower  draws  $30  for  private  use. 

Send  National  Tool  &  Stamping  Co.,  on  %,  check  for  $758.50. 

Receive  from  Wilcox  Hardware  Co.,  on  %,  bank  draft  for  $300. 

Receive  from  George  Keller,  check  in  payment  of  his  bill  of  the  24th  ult. 

Pay  for  letter-heads,  $15.50. 

Pay  for  current  for  electric  lights,  $16. 

Cash  sales,  $175. 

18. 

Discount  for  M.  L.  Bauserman,  his  note' in  our  favor  for  $800  dated  Nov.  16th,  19 — ,  due 
90  days  after  date,  giving  him  a  check  for  the  proceeds. 

We  receive  from  our  attorney,  Robert  E.  Traverse,  the  amount  of  Z.  L.  Smith's  account  less 
the  attorney's  fee  of  20%  for  making  the  collection. 

Sell  to  Union  Hardware  Co.,  on  %,  10  doz.  cherry  stoners  at  $5  per  doz.,  5  doz.  frying  pans, 
No.  7,  at  $8  per  doz.,  5  doz.  prs.  McKinney's  Barn  Door  Hangers  at  $18  per  doz.,  4  doz.  Osborne's 
Hand  Cultivators  at  $15  per  doz.,  1  windmill  pump  at  $22.30. 

Send  to  F.  H.  Davidson  &  Co.,  on  %,  10  doz.  butchers'  cleavers  at  $1.75  per  doz.,  20  Walker 
Hay  Forks  at  $2.50  each,  5  doz.  hedge  trimmers  No.  1,  at  $8  per  doz.,  600  lbs.  Italian  Steam  Packing 
at  10|^  per  lb.,  1  doz.  Advance  Apple  Parers  at  $4.50,  1  doz.  door  holders  at  $3.65. 

Sell  to  Central  Pa.  Supply  Co.,  on  %,  10  doz.  coffee  mills  at  $5.92  per  doz. 

Sell  to  Baltimore  Hardware  Co.,  on  %,  10  doz.  carpet  stretchers  at  $21  per  doz.,  2  doz.  Easy 
Lawn  Swings  at  $85  per  doz.,  4  doz.  razors  at  $10  per  doz.,  1  doz.  breast  drills  at  $5.90. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        163 

Sell  to  J.  C.  Bailey,  on  %,  1  gross  double  calipers  at  $48,  12  doz.  White  Mountain  Potato 
Parers  at  $6  per  doz.,  1  set  Firmer  Chisels  at  $7.40. 

Sell  to  J.  F.  Pearson  &  Co.,  on  %,  24  doz.  Sprague  Can  Openers  at  $3  per  doz.,  1  doz.  butcher 
knives  at  $3.28. 

Cash  sales,  $324.80. 

19. 

draws  $75  on  account. 


Student's  name 

Receive  from  Edward  Steiner  &  Co.,  check  for  $167.38. 
Receive  from  J.  C.  Bailey,  check  in  payment  of  his  bill  of  the  27th  ult. 
John  Sellers  draws  $25  for  private  use. 

Pay  National  Tool  &  Stamping  Co.'s  bill  of  the  14th  instant,  less  2%  discount. 
Send  to  New  England  Cutlery  Co.,  bank  draft  in  payment  of  their  bill  of  the  7th  instant. 
Pay  exchange  on  above  draft,  50^. 
Cash  sales,  $104.32. 

20. 

Sell  to  Miller  Supply  Co.,  on  %,  5  doz.  self  measuring  faucets  at  $32  per  doz.,  2  doz.  wood 
faucets  at  $2.70  per  doz. 

Sell  to  Keystone  Hardware  Co.,  on  %,  10  3|  inch  shallow  well  pumps  at  $15  each,  5,  2\  inch 
deep  well  pumps  at  $15  each. 

Sell  to  Frank  Beall  &  Co.,  on  %,  1  doz.  hydrant  niters  at  $7.82,  10  doz.  files  at  $3  per  doz., 
5  No.  4  sausage  stuffers  at  $30  each,  6  doz.  hand  saws  at  $18  per  doz.,  1  doz.  machinists'  levels 
at  $12. 

Sell  to  Lindamuth  &  Co.,  on  %,  4  doz.  Osborne's  Hand  Cultivators  at  $15  per  doz.,  4  3  inch 
deep  well  pumps  at  $15  each,  1  3|  inch  lift  pump  at  $8.50,  2  doz.  razors  at  $10  per  doz. 

Buy  typewriter  for  $100.     The  agent  accepted  our  old  machine  at  $25  in  part  payment. 

Send  to  Francis  Albert  &  Co.,  check  for  their  bill  of  the  14th  inst.,  less  2%  discount. 

Cash  sales,  $243.86. 

21. 

,    Buy  from  the  New  England  Cutlery  Co.,  on  %,  100  doz.  axes,  list  price  $12.28  per  doz.  less 
discounts  20-20-20,  1  doz.  hatchets,  list  price  $7.94,  less  discounts  10-10-10. 

Buy  from  Maryland  Hinge  Co.,  on  %,  100  doz.  store  door  hinges  at  $12.60  per  doz.,  11  doz. 
gate  hinges  at  $4.35  per  doz. 

Send  William  H.  Cole  &  Son,  on  %,  check  for  $865.70. 

Keystone  Hardware  Co.  accepted  our  draft  on  the  20th  instant  for  $500,  payable  at  10  days' 
sight. 

Receive  from  George  Keller  check  in  payment  of  his  bill  of  the  15th  instant  less  2%  discount. 

Pay  Bell  Telephone  Co.  for  one  year's  rent  of  'phone,  $65;  pay  for  postage  stamps,  $5;  for 
cleaning  windows  and  floor,  $3.50;  for  office  clock,  $12. 

Cash  sales,  $282.43. 

22. 

Send  James  Lower  and  John  Sellers  $15  each  for  traveling  expenses. 

Pay  freight,  B.  &0.  R.  R.,  $5.80. 

Receive  from  George  Yakel  &  Co.,  on  %,  check  for  $234.86. 

Receive  from  J.  C.  Bailey,  check  in  payment  of  his  bill  of  the  18th  instant,  less  2%  discount. 

Sell  to  A.  B.  Cochrane  &  Co.,  on  %,  10,000  ft.  hemp  fuse  at  $2.60  per  M.,  10  doz.  picks  at 
$8  per  doz.,  6  doz.  Perfection  Post  Hole  Diggers  at  $8  per  doz.,  5  doz.  machinists'  levels  at  $12  per 
doz.,  3  doz.  Disston's  Pruning  Hooks  at  $12  per  doz.,  1  doz.  razors  at  $10,  1  doz.  frying  pans  at 
$3.75. 


164        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  to  Bailey  Bros.  &  Raub,  on  %,  5  doz.  hay  knives  at  $10  per  doz.,  5  doz.  razors  at  $10 
per  doz.,  1  doz.  weeding  hoes  at  $10.39. 

Sell  to  J.  W.  Russell,  on  %,  10  doz.  Monarch  Carpet  Sweepers  at  $24  per  doz.,  12  Z\  inch  shal- 
low well  pumps  at  $15  each,  1  doz.  rip  saws  at  $30,  1  doz.  nail  pullers  at  $13.72. 

Sell  to  M.  L.  Bauserman,  on  %,  10  doz.  gate  hinges  at  $5.80  per  doz.,  6  doz.  iron  planes  at 
$5  per  doz.,  8  doz.  wire  pliers  at  $9  per  doz.,  3  gross  8  oz.  U.  S.  Metal  Polish  at  $12  per  gross,  3 
gross  2  qt.  corn  poppers  at  $10  per  gross,  8  doz.  Disston's  Pruning  Hooks  at  $8  per  doz.,  6  doz. 
Perfection  Post  Hole  Diggers  at  $8  per  doz.,  10  doz.  4|  inch  hay  fork  pulleys  at  $6  per  doz.,  6  doz. 
Anti-friction  6  inch  Pulleys  at  $12  per  doz.,  6  No.  235,  windmill  pumps  at  $16  each,  2  Meyer's 
Hay  Unloaders  at  $7  each,  2  doz.  Lightning  Fish  Scalers  at  $3.20  per  doz. 

Cash  sales,  $135.62. 

23. 

Pay  salaries,  Clerks  $30;  Stenographer  $10;  Driver  $10. 
Receive  from  Lindamuth  &  Co.,  check  in  full  of  account. 
Pay  water  rent,  $15. 

Receive  from  Cumberland  Hardware  Co.,  on  %,  their  note  at  30  days  for  $247.97,  dated 
Nov.  22nd,  19—,  with  interest  at  6%. 
Cash  sales,  $76.28. 

25. 

Return  to  New  England  Cutlery  Co.,  hdwe.  amounting  to  $85.60,  from  bill  of  the  21st 
instant.     We  remit  at  the  same  time  for  this  bill  less  2%  discount  and  freight  allowance  of  $2.40. 

Buy  from  Henry  Disston's  Sons,  on  %,  10  doz.  cross-cut  saws  at  $27  per  doz.,  1  doz.  small 
hand  saws  at  $5.50. 

draws  $200  on  account. 

Student's  name 

Pay  for  advertising,  $25. 

Pay  for  partition  in  2nd  floor  of  building,  $50.  (We  class  this  work  under  the  head  of 
repairs.) 

Receive  from  A.  B.  Cochrane  &  Co.,  on  %,  check  for  $400. 

Baltimore  Hardware  Co.,  pays  its  bill  of  the  18th  instant  less  2%  discount. 

Buy  from  Mann  Axe  Co.,  on  %,  100  doz.  axes  at  6.40  per  doz.,  1  doz.  hatchets  at  $3.85. 

Buy  from  C.  A.  Starrell  &  Co.,  on  %,  100  doz.  nail  hammers  at  $7.30  per  doz.,  2  Magnetic 
Tack  Hammers  at  $1.60  each. 

Return  to  the  New  England  Cutlery  Co.   10  doz.  axes  at  $6.30  per  doz.  because  defective. 

Buy  from  Mann  Axe  Co.,  on  %,  100  doz.  axes,  list  price  $51.20  per  doz.  less  discounts  50- 
50-50,  1  doz.  hatches,  list  price  $5.26,  less  discounts  10-10-10. 

Buy  from  C.  A.  Starrell  &  Co.,  on  %,  100  doz.  nail  hammers,  list  price  $17.29,  less  discounts, 
25-25-25,  2  Magnetic  Tack  Hammers,  list  price  $2.76,  less  discounts,  16f-16f-16f . 

Cash  sales,  $156.38. 

26. 

Sell  to  J.  R.  M.  Adams,  on  %,  10  cheese  presses  at  $4.30  each,  12  doz.  communicating  door 
locks  at  $15  per  doz.,  10  doz.  garden  rakes  at  $6  per  doz.,  4  No.  4  sausage  stuff ers  at  $30  each,  3 
3-inch  lift  pumps  at  $9  each,  1  doz.  door  knobs  at  $2.65. 

Sell  to  Marshall,  Westcoat  &  Co.,  on  %,  12  doz.  lemon  squeezers  at  $4  per  doz.,  6  doz.  ma- 
chinists' levels  at  $12  per  doz.,  4  doz.  carpet  stretchers  at  $24  per  doz.,  12  doz.  Columbia  Tack 
Pullers  at  $5.00  per  doz.,  20  doz.  "  1847"  knives  and  forks  at  $3.50  per  doz.,  5  doz.  prs.  shears  at 
$6  per  doz.,  3  doz.  No.  2  box  scrapers  at  $4  per  doz.,  1  doz.  ice  awls,  $6.43. 

Sell  to  Young  Bros,  on  account,  1  doz.  lawn  swings  $87.25. 

Sell  to  Dillon  &  Co.,  on  %,  10  blacksmiths'  drills  at  $10  each,  10  doz.  drawing  knives  at  $12.50 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        165 

per  doz.,  12  doz.  sets  framing  chisels  at  $5  per  doz.,  10  doz.  Keystone  Egg  Beaters  at  $6  per  doz., 
2  doz.  grass  hooks  at  $2.91  per  doz. 

Sell  to  Edward  Steiner  &  Co.,  on  %,  10  meat  cutters  at  $47  each,  1  doz.  meat  hooks  at  $2.34. 

Sell  to  Miller  Hardware  Co.,  on  %,  8  doz.  apple  parers  at  $4  per  doz.,  5  doz.  Perpetual  Carpet 
Sweepers  at  $20  per  doz.,  1  box  assorted  pencils,  $2.17. 

George  Evans  draws  $25  on  account. 

John  Sellers  draws  $30  on  account. 

Pay  for  pavement  in  front  of  store,  $160. 

Receive  from  F.  H.  Davidson  &  Co.,  on  %,  check  for  $150. 

Cash  sales,  $427.80. 

27. 

Having  decided  that  it  costs  us  more  to  keep  our  own  teams  than  it  does  to  have  our  hauling 
done,  we  dispose  of  horses,  wagons  and  harness  for  the  sum  of  $380. 

A.  E.  Trader  draws  $150  on  account. 

Receive  from  M.  L.  Bauserman,  check  in  payment  of  his  bill  of  the  22nd  instant,  less  2% 
discount. 

Receive  from  J.  W.  Russell,  bank  draft  for  $248.50. 

Receive  from  Samuel  Emmert,  check  in  full  of  account. 

Send  Maryland  Hinge  Co.,  check  for  $800  to  apply  on  %. 

We  contribute  towards  the  Newsboys'  Thanksgiving  Dinner,  $5. 

Cash  sales,  $175.30. 

29. 

Sell  to  C.  C.  Pursey  &  Co.,  on  %,  9  sausage  stuffers  at  $30  each,  1  shallow  well  pump  at  $13.45 

Sell  to  J.  H.  Constantine,  on  %,  1  gross  kraut  cutters  at  $20,  5  doz.  Monarch  Carpet  Sweepers 
at  $24  per  doz.,  2  American  Meat  Cutters,  No.  B,  at  $50  each,  1  doz.  spoke  shaves  at  $5.27. 

Sell  to  Samuel  Emmert,  on  %,  10  doz.  hollow  handle  screw  drivers  at  $6.80  per  doz.,  5  doz. 
Transparent  Carpet  Sweepers  (plate  glass  top)  at  $32  per  doz.,  10  American  Meat  Cutters,  No.  4,. 
at  $25  each,  6  Meyer's  Hay  Unloaders  at  $7  each,  1  doz.  hedge  shears  at  $6.80. 

Sell  to  Cumberland  Hardware  Co.,  on  %,  20  Meyer's  Hay  Unloaders  at  $7  each,  1  doz.  screen 
doors  at  $8.50. 

Sell  to  Wilcox  Hardware  Co.,  on  %,  5  doz.  wagon  jacks  at  $18  per  doz.,  10  3-inch  deep  well 
pumps  at  $15  each,  3  doz.  small  iron  planes  at  $4  per  doz.,  100  transom  lifters,  $15.53. 

Sell  to  George  Yakel  &  Co.,  on  %,  10  doz.  Monarch  Carpet  Sweepers  at  $24  per  doz.,  6  doz. 
Montrass  Carpet  Stretchers  at  $6  per  doz.,  4  American  Meat  Cutters,  No.  B,  at  $50  each,  2  doz. 
barn  door  latches  at  $2  per  dozen,  1  doz.  drawing  knives  at  $12.75. 

Send  James  Lower  and  John  Sellers  $15  each  for  traveling  expenses. 

Send  check  to  Anderson  &  Ireland  in  full  of  account. 

Cash  sales,  $84.50. 

30. 

Pay  salaries,  Clerks  $30;  Stenographer  $10;  Driver  $10. 
Keystone  Hardware  Co.  pay  their  acceptance  of  the  20th  instant. 
Cash  sales,  $25.10. 
Credit  Salesmen,  Bookkeeper  and for  their  salaries. 

Student's  name 


166        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Take  a  Trial  Balance  and  close  Ledger. 

The  inventories  are  as  follows : 

Merchandise $9,675.00 

Store  and  Office  Fixtures 1,475 .  00 

Unexpired  Insurance 43 .  00 

Real  Estate 12,920.00 

Unexpired  Taxes 74 .  00 

Cash  on  hand 

After  the  Ledger  has  been  closed  take  another  Trial  Balance  and  make  out  statements  of  Assets 
&  Liabilities  and  of  Profits  &  Losses. 

WRITTEN  TEST  NO.  13. 

1.  What  is  Trade  Discount?    Why  used?    To  whom  allowed? 

2.  What  is  Mdse.  or  Cash  discount? 

3.  What  is  Bank  discount?    True  discount? 

4.  In  Trade  discount  why  use  a  series  of  discounts  instead  of  a  single  discount? 

5.  Is  the  customer  charged  with  the  net  or  gross  amount  of  the  sale? 

6.  What  do  you  mean  by  catalogue  price?     Market  price?     Net  selling  price? 

7.  What  is  an  invoice?    A  bill?    A  deposit  slip?    A  statement? 

8.  How  do  you  handle  the  fractional  parts  of  a  cent  when  taking  off  trade  discounts? 

9.  Explain  retail, — wholesale, — installment, — manufacturer, — jobber, — merchant,— creditor, 
debtor, — credit, — debit, — solvency, — insolvency, — original  net  investment, — net  capital, — present 
worth, — balance. 

10.  When  is  Loss  &  Gain  account  used  as  an  open  account? 

11.  Should  it  be  included  in  the  Trial  Balance  if  open?  What  is  done  with  it  when  closing 
the  ledger? 

12.  What  entry  is  made  when  cash  in  stolen?  Mdse?  When  a  horse  dies?  When  a  build- 
ing burns?    When  cash  is  found?     When  a  donation  is  made  to  charity? 

13.  When  the  liabilities  are  greater  than  the  resources  what  does  the  difference  show? 

14.  If  the  year's  business  shows  a  net  loss,  does  it  indicate  that  the  firm  is  insolvent?    Why? 

15.  If  in  posting  an  amount  is  omitted,  what  effect  will  it  have  on  the  trial  balance?  If 
posted  twice?  If  posted  to  the  wrong  side?  If  the  amount  has  been  computed  incorrectly  in 
the  original  entry? 

16.  Why  are  notes  and  acceptances  discounted? 

17.  What  is  discount?  Interest?  Proceeds?  Face  of  a  note?  Indorsement?  Indorser? 
Protest?    Notice?    Notary  Public?     Prothonotary? 

18.  If  a  note  draws  interest,  how  is  the  amount  due  at  maturity  found? 

19.  How  is  an  interest  bearing  note  discounted?    Name  the  legal  holidays  in  Pennsylvania. 

20.  What  is  the  law  in  Pennsylvania  regarding  Sundays  and  holidays?  Why  is  the  day  of 
discount  added  when  computing  discount?  How  can  you  find  the  day  of  the  week,  on  which  a 
note  will  fall  due? 

21.  Explain: — Nominal  due  date;  legal  due  date;  term  of  discount;  days  of  discount;  pro- 
ceeds; third  party;  "no  protest;"  joint  and  several  note;  overdue  note;  certified  check;  honoring 
a  draft;  security;  warranty;  guaranty;  " lifting"  a  note;  assets. 

22.  What  do  you  mean  by  double  checking  when  you  are  trying  to  locate  an  error  in  your 
Trial  Balance? 

23.  What  things  should  be  done  before  resorting  to  double  checking? 

24.  Why  is  checking  necessary?     Explain. 

25.  My  Trial  Balance  is  out  $74.25.     What  do  you  advise? 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        167 

CONTROLLING  ACCOUNTS. 

189.  In  many  businesses  three  or  more  Ledgers  are  kept  instead  of  keeping  the  different 
kinds  of  accounts  in  various  parts  of  the  same  Ledger.  For  instance,  one  Ledger  known  as  a  Pri- 
vate Ledger  or  as  a  General  Ledger  may  be  kept  to  contain  the  Stock  Accounts  and  the  Private 
Accounts  of  the  Proprietors  of  the  business,  the  Merchandise  Account,  the  Merchandise  Purchases 
account,  the  Merchandise  Sales  account,  the  Expense  account,  the  Store  and  Office  Fixtures  ac- 
count, the  Bills  Receivable  account,  the  Bills  Payable  account  and  other  similar  general  business 
accounts.  Another  Ledger  known  as  the  Customers'  Ledger  or  Sales  Ledger,  may  be  kept  to  contain 
the  accounts  with  all  customers  and  another  Ledger  known  as  a  Purchase  Ledger  or  as  a  Creditors' 
Ledger  may  be  kept  to  contain  the  accounts  with  persons  from  whom  purchases  are  made. 

190.  When  a  Private  Ledger  or  General  Ledger  is  kept,  it  is  a  common  practice  to  keep 
one  or  more  controlling  accounts  in  it  such  as  an  Accounts  Receivable  account,  or  an  Accounts 
Payable  account,  or  both.  To  keep  an  Accounts  Receivable  account  it  is  only  necessary  at  the 
time  the  account  is  opened  to  debit  the  account  with  the  amount  owed  on  account  to  the  person 
for  whom  the  books  are  kept  and  then  to  debit  the  account  with  any  additional  sums  which  may 
become  owing  to  him  and  to  credit  the  account  with  all  sums  received  in  payment  or  part  payment 
of  the  accounts  above  mentioned.  However,  instead  of  entering  each  debit  and  each  credit  to 
this  account  separately,  it  is  customary  to  keep  a  special  column  on  the  debit  side  of  the  Cash 
Book  headed  "  Accounts  Receivable"  and  to  extend  into  this  column  all  sums  received  in  payment 
or  in  part  payment  of  accounts.  This  column  is  footed  and  forwarded  from  page  to  page  until 
the  end  of  the  month  or  until  any  other  set  time  at  which  a  Trial  Balance  is  to  be  taken,  and  the 
total  is  then  transferred  or  posted  to  the  credit  side  of  the  Accounts  Receivable  account  in  the 
General  Ledger.  Two  special  columns  must  also  be  kept  in  the  Journal,  one  of  them  headed  Ac- 
counts Receivable  Debits,  and  the  other  Accounts  Receivable  Credits. 

191.  Into  the  Accounts  Receivable  Debits  column  must  be  extended  all  sums  for  which  other 
persons  become  indebted  on  account  to  the  person  for  whom  the  books  are  kept.  This  Accounts 
Receivable  Debits  column  in  the  Journal  is  footed  and  forwarded  from  page  to  page  until  the  end 
of  the  month  or  until  any  other  set  time  at  which  a  Trial  Balance  is  to  be  taken  and  the  total  is 
then  posted  to  the  debit  side  of  the  Accounts  Receivable  account  in  the  General  Ledger. 

192.  Into  the  Accounts  Receivable  Credits  column  must  be  extended  all  credits  on  Accounts 
Receivable  appearing  in  the  Journal.  The  chief  credits  of  this  class  will  be  the  credit  if  a  customer 
gives  the  person  for  whom  the  books  are  kept  a  note  in  full  or  part  settlement  of  account  or  accepts 
his  time  draft,  and  the  credit  for  goods  returned  by  the  customer,  and  the  credit  for  any  other 
allowance  made  the  customer  such  as  an  allowance  for  shortage  or  for  defective  goods  or  for  freight 
which  according  to  agreement  should  have  been  paid  by  the  shipper.  This  Accounts  Receivable 
Credits  column  in  the  Journal  is  footed  and  forwarded  from  page  to  page  until  the  end  of  the 
month  or  until  any  other  time  at  which  a  Trial  Balance  is  to  be  taken  and  the  total  is  then  posted 
to  the  credit  side  of  the  Accounts  Receivable  account  in  the  General  Ledger. 

193.  If  the  work  has  been  correctly  done,  the  difference  between  the  debit  side  and  the  credit 
side  of  the  Accounts  Receivable  account  in  the  General  Ledger  will  be  exactly  the  same  as  the  sum 
of  the  differences  from  all  of  the  accounts  in  the  Customers  Ledger  and  the  bookkeeper  in  charge 
of  the  General  Ledger  can  thus  take  his  Trial  Balance  without  referring  to  the  individual  accounts 
in  the  Customers'  Ledger. 

194.  You  will  note  that  the  keeping  of  these  special  columns  to  supply  figures  for  the  Control- 
ling account  does  not  alter  the  regular  routine  of  the  bookkeeping  work  in  any  particular.  All 
posting  must  be  done  just  the  same  as  though  no  Accounts  Receivable  columns  were  being  kept 
in  the  Cash  book  and  the  Journal.  Note  also  that  when  you  transfer  or  post  the  total  of  the  Ac- 
counts Receivable  column  in  the  Cash  book  to  the  credit  side  of  the  Accounts  Receivable  account 
in  the  General  Ledger  there  is  no  debit  made  to  balance  this  credit  because  this  is  not  a  new  or 
separate  credit  but  is  just  a  statement  of  the  total  of  the  credits  made  to  Customers'  accounts  when 


168        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

they  made  payments  on  their  indebtedness  and  that  likewise  the  posting  of  the  totals  of  the  Ac- 
counts Receivable  debits  and  the  Accounts  Receivable  credits  columns  of  the  Journal  to  the  Ac- 
counts Receivable  account  in  the  General  Ledger  is  not  entering  a  new  debit  and  a  new  credit  on 
the  books  but  is  simply  transferring  a  debit  and  a  credit  from  one  part  of  the  books  to  another  part 
of  the  books  and  for  this  reason  these  entries  do  not  require  any  debits  or  credits  on  the  books  to 
balance  them. 

195.  An  Accounts  Payable  account  in  the  General  Ledger  may  be  kept  in  a  manner  similar 
to  the  keeping  of  an  Accounts  Receivable  account.  A  special  column  headed  "Accounts  Payable" 
is  used  on  the  credit  side  of  the  Cash  Book  into  which  are  extended  all  payments  made  on  account 
by  the  person  for  whom  the  books  are  kept  and  the  total  of  this  column  is  posted  at  stated  intervals 
to  the  debit  side  of  the  Accounts  Payable  account  in  the  General  Ledger.  Two  special  columns 
are  kept  in  the  Journal,  the  one  headed  Accounts  Payable  Credits  and  the  other  Accounts  Payable 
Debits.  Into  the  Accounts  Payable  Credits  column,  the  sum  of  every  purchase  on  account  is 
extended  and  the  total  of  this  column  is  posted  at  stated  periods  to  the  credit  side  of  the  Accounts 
Payable  account  in  the  General  Ledger.  Into  the  Accounts  Payable  Debits  column  is  extended 
the  amount  of  every  Journal  entry  showing  a  decrease  in  the  amount  owed  on  account,  whether 
the  decrease  arises  through  the  giving  of  a  note  or  the  accepting  of  a  time-draft,  or  through  the 
return  of  goods  to  the  person  from  whom  they  were  purchased,  or  through  an  allowance  made  for 
any  reason  on  goods  previously  purchased,  or  in  any  other  way,  and  the  total  of  this  column  is 
posted  at  stated  periods  to  the  debit  side  of  the  Accounts  Payable  account  in  the  General  Ledger. 

THE  BILL  BOOK  AS  A  BOOK  OF  ORIGINAL  ENTRY 

196.  Heretofore  we  have  used  the  Bill  Book  merely  as  an  auxiliary  record  book,— a  subsidi- 
ary record, — for  handling  the  many  details  which  must  be  considered  when  we  handle  notes  and 
acceptances. 

In  our  future  work  we  shall  use  the  Bill  Book  as  a  book  of  original  entry  for  notes  and  ac- 
cepted drafts.  This  means  that  we  shall  not  enter  the  items  above  mentioned  in  the  Journal  as 
heretofore.  We  shall  enter  Bills  Receivable  and  Bills  Payable  only  in  the  Bill  Book  and  using  it 
as  a  posting  medium  shall  post  from  it  to  the  Ledger. 

In  the  case  of  the  Bills  Receivable  Book,  we  shall  credit  each  person  who  gives  us  a  note  or 
accepts  our  time  draft,  and  shall  charge  Bills  Receivable  Account  in  the  General  Ledger  at  the 
end  of  each  Trial  Balance  period  for  the  total  of  notes  and  acceptances  received  during  the  period. 

We  shall  handle  Bills  Payable  in  the  same  way,  only,  of  course,  reversed,  debiting  each  person 
to  whom  we  give  a  note  or  whose  time  draft  we  accept,  and  at  the  end  of  the  Trial  Balance  period 
crediting  Bills  Payable  account  with  the  total  of  the  notes  and  acceptances  issued  during  the 
month. 

Bills  Receivable  and  Bills  Payable  accounts  become  Controlling  accounts  when  the  plan  above 
outlined  is  followed. 

SET  6. 

wholesale  grocery  business  of  &  Trader. 

(Student's  name) 

and  A.  E.  Trader  have  entered  into  partnership,  Jan.  1, 19 — ,to  conduct  a  Whole- 


(Student's  name) 

sale  Grocery  Business,  the  firm  to  be  known  as and  Trader.     Gains  and  losses  to  be 

(Student's  name) 

shared  equally,  after  allowing  each  of  the  partners  6%  interest  on  his  investment,  as  shown  by 
his  stock  account,  and  allowing a  salary  of  $75  a  month  and  A.  E.  Trader  a  salary 

(Student's  name) 

of  $85  a  month  for  their  services  in  conducting  the  business. 
. invests  cash,  $6,000. 

(Student's  name) 

A.  E.  Trader,  who  has  been  conducting  the  business  heretofore,  invests  cash,  $434;  merchan- 
dise, as  per  inventory,  $13,455.61;  store  and  office  fixtures,  $825;  accounts  due  him  as  follows: 
Bryant  &  Clarvoe,  2801  N.  Lee  St.,  $70.54;  Jordon  Stabler  Co.,  318  N.  Charles  St.,  $386.69;  McGaw 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        169 

&  Co.,  906  S.  21st  St.,  $112.47;  Gold  Bros.,  323  W.  Saratoga  St.,  $131.94;  Reitz  Bros.,  416 
W.  Lexington  St.,  $45.28;  Boyer  &  Co.,  114  German  St.,  $9.80;  William  Jackson,  217  E.  Balti- 
more St.,  $58.38;  L.  W.  Johnson,  Baltimore,  Md.,  $202.95;  Cooper  Bros.,  Winchester,  Va.,  $124.88; 
Miller  &  Hartman,  Lancaster,  Pa.,  $444.50;  C.  Walburn  &  Co.,  Charleston,  S.  C.  $200.29;  Otto 
Tielman  &  Son,  Columbus,  S.  C,  $114.95;  J.  B.  Friday  &  Co.,  Danville,  Va.,  $144.76;  Baker  & 
Co.,  Staunton,  Va.,  $610.21;  Wagner  &  Johnson,  Charleston,  S.  C,  $113.75;  Hayes  &  Nurff, 
Atlanta,  Ga.,  $168.41;  J.  T.  Bailey,  2040  N.  2nd  St.,  $7.19;  Frank  Reist,  York,  Pa.,  $87.15; 
accounts  owed  by  him  as  follows:  Thomas  G.  Cranwell  &  Co.,  120  S.  Delaware  Ave.,  $74.07;  C. 
A.  Gambrill  Mfg.  Co.,  14  E.  German  St.,  $1,157;  The  National  Biscuit  Co.,  1301  Glenwood  Ave., 
Phila.,  $611.75;  The  Woolson  Spice  Co.,  Toledo,  O.,  $783.13;  Schriver,  Bentley  &  Co.,  208  W. 
German  St.,  $242.25;  J.  A.  Edmondson  &  Son,  108  Hanover  St.,  $24.75;  Edward  L.  Palmer  & 
Co.,  Baltimore,  Md.,  $455.80. 

In  Sets  6,  7  and  8,  the  student  may  run  three  Ledgers, — a  General  Ledger  containing  the 
business  accounts,  a  Sales  Ledger  containing  the  Customers'  Accounts  and  a  Purchase  Ledger  con- 
taining the  Creditors'  accounts.  Two  Controlling  accounts  shall  be  kept  in  the  General  Ledger 
according  to  the  plan  described  in  articles  189  to  195, — an  Accounts  Receivable  account  and  an 
Accounts  Payable  account.  Also  the  Bill  Book  may  be  used  as  a  book  of  original  entry  in  accord- 
ance with  article  196. 

In  this  set  you  may  use  the  following  accounts  besides  the  necessary  personal  accounts:  A.  E. 
Trader,  Stock;  A.  E.  Trader,  Private; Stock; Private;  Merchandise; 

(Student's  name)  (Student's  name) 

Cash;  Expense;  Bills  Receivable;  Bills  Payable;  Interest;  Advertising;  Store  and  Office  Fixtures; 
Freight  and  Drayage;  Teams;  Insurance;  Real  Estate;  Salaries;  Salesmen's  Traveling  Expense; 
and  accounts  with  the  following  traveling  salesmen:  Fred.  Baker,  whom  we  pay  $75  per  month; 
Robert  West,  whom  we  pay  $70  per  month;  and  Charles  Saum,  whom  we  pay  $65  per  month.  We 
have  two  clerks,  John  Jones,  whom  we  pay  $8  per  week,  and  James  Marshall,  whom  we  pay  $12 
per  week,  and  a  bookkeeper,  Albert  Handley,  whom  we  pay  $15  per  week. 

Make  out  bills  for  all  goods  sold;  receipts  for  all  money  received;  checks  for  all  money  paid; 
all  notes  issued;  and  all  drafts  drawn  upon  customers. 

JAN.  2. 

Buy  of  Thos.  G.  Cranwell  &  Co.,  on  %,  75  doz.  cans  Eagle  Brand  Tomatoes  at  57^  per  doz., 
100  doz.  cans  corn  at  57|^  per  doz. 

Sell  to  Boyer  &  Co.,  on  %,  12  bbls.  Superior  Family  Flour  at  $4,  3  bbls.  mackerel  at  $18 
per  bbl. 

Sell  Jordan  Stabler  Co.,  on  %,  400  lbs.  E.  C.  Coffee  at  15^  per^  lb.,  30  doz.  cans  Crawford 
Peaches  at  $1.85  per  doz.,  3  bbls.  (160  gals.)  cider  vinegar  at  6^  per  gal. 

Pay  drayage,  $3.35. 

Sell  Cooper  Bros.,  on  %,  24  doz.  cans  peaches  at  $1  per  doz.,  5  bags,  100  lbs.  each,  Rio  Coffee 
at  21c"  per  lb.,  5  boxes  crackers  at  $1.50  per  box. 

Receive  from  Reitz  Bros,  on  %,  note  for  $45.28  at  30  days  with  interest  at  6%. 

Pay  for  postage  and  stationery,  $5.25. 

Cash  sales,  $243.90. 

draws  for  private  use,  $50. 

(Student's  name) 

3. 

Buy  from  J.  A.  Edmondson  &  Son,  on  %,  100  bbls.  apples  at  $2.25  per  bbl.,  50  boxes  lemons 
at  $2.15  per  box,  75  boxes  oranges  at  $2.40  per  box. 

Sell  to  Wm.  Jackson,  on  %,  12  doz.  bottles  pickles  at  $1  per  doz.,  10  bbls.  sugar,  3,436  lbs. 
at  5ji  per  lb.,  2  bbls.  N.  O.  molasses,  103  gals.,  at  32^  per  gal. 


170        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Robert  West  draws  $25  on  his  salary. 

Sell  Miller  &  Hartman,  on  %,  50  boxes  California  figs  at  $1  per  box,  20  cheese,  60  lbs.  each,  at 
12^  per  lb.,  25  bbls.  apples  (Baldwins)  at  $2.50  per  bbl. 
Pay  rent  of  store  for  Jan.,  $65. 
Cash  sales,  $346.82. 

4. 

Buy  from  National  Biscuit  Co.,  100  cases  Uneeda  Biscuit  at  75j£  per  case,  20  boxes  ginger  snaps 
at  $1.60  per  box. 

Sell  C.  Walburn  &  Co.,  on  %,  24  hams,  252  lbs.,  at  12|^  per  lb.,  5  doz.  bottles  choice  pickles 
at  $1  per  doz.,  8  cases  Uneeda  Biscuit  at  $2  per  case,  3  boxes  Proctor  &  Gamble's  Soap  at  $2.45 
per  box. 

Receive  from  Jordan  Stabler  Co.,  check  for  $350. 

Sell  Bryant  &  Clarvoe,  on  %,  20  doz.  No.  2  peaches  at  $1  per  doz. 

Cash  sales,  $156.23. 

5. 

Sell  L.  W.  Johnson,  on  %,  24  doz.  cans  peas  at  $1.15  per  doz.,  50  lbs.  whole  pepper  at  18^  per 
lb.,  3  cheese,  60  lbs.  each,  at  12^  per  lb. 

Sell  to  Otto  Tielman  &  Son,  25  bbls.  granulated  sugar,  8,630  lbs.,  at  5f^  per  lb.,  12  doz. 
cans  corn  at  75^  per  doz. 

Pay  salaries,  James  Marshall,  $12,  John  Jones,  $8,  Albert  Handley,  $15. 

Send  Thomas  G.  Cranwell  &  Co.,  our  note  for  $100  at  60  days  with  interest. 

Cash  sales,  $82.30. 

7. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  100  bbls.  sugar,  34,330  lbs,,  at  b\£  per  lb.,  50  doz. 
cans  strawberries  at  $1.30  per  doz.,  75  cases  Quaker  Oats  at  $2  per  case. 

Sell  J.  B.  Friday  &  Co.,  on  %,  12  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  15  doz.  cans 
tomatoes  at  75^  per  doz. 

Pay  drayage  to  date,  $6.75. 

Cash  sales,  $120.35. 

Send  Charles  Saum  $15  for  traveling  expenses. 

Pay  for  putting  in  new  window,  $2.25. 

Receive  from  Cooper  Bros.,  $225  on  %. 

Cash  sales,  $92.60. 

9. 

Sell  to  Reitz  Bros.,  on  %,  10  cases  Uneeda  Biscuit  at  $2  per  case,  3  boxes  Ivory  Soap  at  $6 
per  box,  25  lbs.  boneless  codfish  at  6|^  per  lb. 

Sell  Baker  &  Co.,  12  bbls.  gran,  sugar,  4,120  lbs,  at  5|^  per  lb.,  5  boxes  ginger  snaps  at  $1.60 
per  box,  5  cases  Quaker  Oats  at  $2.25  per  case. 

Cash  sales,  $40.65. 

A.  E.  Trader  draws  for  private  use,  $25. 

10. 

Receive  from  J.  B.  Friday,  check  for  $125  to  apply  on  %. 

Pay  gas  bill  $15.75. 

Pay  for  repairs  to  elevator,  $17.50. 

Cash  sales,  $78.25. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        171 

11. 

Buy  from  Williamson  Creamery  Co.,  Williamson,  Pa.,  on  %,  50  cheese,  60  lbs.  each,  at  9£ 
per  lb. 

Buy  from  C.  *A.  Gambrill  Mfg.  Co.,  100  bbls.  Best  Flour  at  $4  per  bbl.,  50  bbls.  Superfine 
Flour  at  $3.75  per  bbl. 

Sell  Robert  Jones  &  Co.,  Columbia,  S.  C,  on  %,  2  bbls.  vinegar,  100  gals.,  at  6^  per  gal.,  12 
doz.  cans  string  beans  at  50^  per  doz.,  2  sacks  rice  at  $2.10  per  sack. 

Cash  sales,  $136.40. 

12. 

Pay  salaries  as  follows:  John  Jones,  $8,  James  Marshall,  $12,  Albert  Handley,  $15. 
Receive  from  Miller  &  Hartman,  check  for  $350  on  %,. 

Sell  Wagner  &  Johnson,  on  %,  3  bbls.  syrup,  160  gals.,  at  32^  per  gal.,  2  boxes  lemons  at  $2 
per  box,  50  cocoanuts  at  $3.50  per. 100. 

14. 

Buy  from  Edward  L.  Palmer  &  Co.,  on  %,  100  boxes  American  Macaroni  at  $1  per  box,  50 
sacks  rice  at  $1.75  per  sack,  75  boxes  starch  at  $2  per  box. 

Send  check  for  $1,500  to  Schriver,  Bentley  &  Co.,  on  %. 

Sell  Gold  Bros.,  on  %,  5  cans  Java  coffee,  250  lbs.,  at  31^  per  lb.,  60  lbs.  English  Breakfast 
Tea  at  60^  per  lb. 

Cash  sales,  $137.40. 

.     15. 

Sell  Cooper  Bros.,  on  %,  2  bbls.  N.  O.  molasses,  108  gals.,  at  32^  per  gal.,  6  cheese,  60  lbs. 
each,  at  12^  per  lb.,  5  boxes  ginger  snaps  at  $1.70  per  box. 
Fred.  Baker  draws  $20  on  his  salary. 
Pay  dray  age,  $6.25. 
Freight,  $17.50. 
Cash  sales,  $27.36. 

16. 

.     Send  Williamson  Creamery  Co.,  check  for  $270,  in  full  of  account. 

Sell  Snyder  &  Co.,  on  %,  5  bbls.  brown  sugar,  1,720  lbs.,  at  5£  per  lb.,  1  bbl.  vinegar,  54  gals., 
at  6^  per  gal. 

Buy  5  tons  coal  at  $5  per  ton. 

Pay. gas  bill,  $25.75. 

(Student's  name) 

Cash  sales,  $125.25. 

17. 

Sell  Wm.  Jackson,  on  %,  5  bbls.  herring  at  $2  per  bbl.,  10  sacks  salt  at  $1.50  per  sack,  4  boxes 
lemons  at  $2.50  per  box. 

Sell  Jordan  Stabler  Co.,  on  %,  25  bbls.  GambrriTs  Best  Flour  at  $4.40  per  bbl.,  20  pails  jelly 
at  40^  per  pail,  24  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz. 

Robert  West  draws  $40  on  his  salary. 

Cash  sales,  $87.26. 

18. 

Buy  of  Woolson  Spice  Co.,  on  %,  10  sacks  coffee,  110  lbs.  each,  at  23^  per  lb.,  25  sacks  Rio 
Coffee,  30  lbs.  each,  at  \2£  per  lb.,  100  lbs.  Oolong  Tea  at  50^  per  lb.,  600  lbs.  tea  at  40^  per  lb. 
Receive  check  from  Baker  &  Co.,  for  $325,  on  %. 
Receive  from  Jordan  Stabler  Co.,  check  for  $275  on  %. 
Cash  sales,  $123.40. 


172        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

19. 

Send  C.  A.  Gambrill  Mfg.  Co.,  our  note  at  60  days  for  $1,500  with  interest. 
Send  check  to  Edward  L.  Palmer  for  $325. 

Sell  Bryant  &  Clarvoe,  12  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  10  bbls.  sugar,  3,436 
lbs.,  at  5|^  per  lb.,  3  bbls.  syrup,  160  gals.,  at  32^  per  gal.,  2  bbls.  vinegar  at  $3.20  per  bbl. 
Receive  from  Hayes  &  Nurff  check  for  $155  on  account. 
Pay  drayage,  $8.25. 
Pay  freight,  $3.60. 
Cash  sales,  $68.40. 

21. 

Pay  salaries  as  follows:  James  Marshall,  $12;  John  Jones,  $8;  Albert  Handley,  $15. 
Receive  from  William  Jackson,  check  for  $120  on  %. 

Sell  Frank  Reist,  on  %,  10  boxes  crackers  at  $1.50  per  box,  5  boxes  ginger  snaps  at  $1.60  per 
box,  2  cases  Rumford  Yeast  Powder  at  $2.70  per  case,  3  doz.  boxes  gelatine  at  $1.60  per  doz. 
Cash  sales,  $156. 

22. 

Buy  from  John  Schoenewolf  &  Co.,  on  %,  20  bbls.  cider  vinegar,  1,060  gals.,  at  b£  per  gal. 
Sell  J.  T.  Bailey  4  cases  Quaker  Oats  at  $2.25  per  case,  24  hams,  258  lbs.,  at  12^  per  lb.,  4 
doz.  extract  vanilla  at  $2  per  doz. 
Pay  telephone  bill,  $75. 

Send  check  to  Woolson  Spice  Co.,  for  $850  on  %. 
Cash  sales,  $76.87. 

23. 

Sell  Maynadier  &  Co.,  on  %,  5  cases  Uneeda  Biscuit  at  $2  per  case,  10  bbls.  Gambrill's  Best 
Flour  at  $4.40  per  bbl.,  3  doz.  cans  preserves  at  $1.50  per  doz. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  25  bbls.  syrup,  1,325  gals.,  at  27^  per  gal.,  20  bbls. 
N.  O.  molasses,  1,085  gals.,  at  27^  per  gal. 

Buy  from  P.  D.  Armour  &  Co.,  Chicago,  111.,  on  %,  200  hams,  2,520  lbs.,  at  8j£  per  lb.,  50  cans 
lard,  2,500  lbs.,  at  6U  per  lb. 

Cash  sales,  $428.63. 

24. 

Sell  L.  W.  Johnson,  on  %,  12  sacks  ground  alum  salt  at  $1.50  per  sack,  10  doz.  cans  salmon 
at  $1.05  per  doz.,  10  bbls.  apples  at  $2.50  per  bbl. 

Sell  C.  Walburn  &  Co.,  on  %,  5  boxes  Ivory  Soap  at  $6  per  box,  10  boxes  oyster  crackers  at 
$1.50,  12  boxes  Snow  Flake  Starch  at  $2. 

Cash  sales,  $138.40. 

Draw  a  sight  draft  on  L.  W.  Johnson  in  favor  of  P.  D.  Armour,  for  $100.00,  and  a  thirty-day 
sight  draft  on  Gold  Brothers  in  favor  of  P.  D.  Armour  for  $50.00.     Send  both  drafts  to  the  payee. 

25. 

Receive  from  Miller  &  Hartman,  their  note  dated  Jan.  23,  for  $250  for  60  days  with  interest. 
Buy  from  J.  A.  Edmondson  &  Son,  on  %,  100  boxes  starch  at  $1.75  per  box,  1,000  cocoanuts 
at  $3.10  per  100,  2  gross  ammonia  at  $1.20  per  doz. 
Cash  sales,  $234.20. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         173 

26. 

Send  Fred.  Baker,  $20  for  traveling  expenses. 

Pay  salaries,  John  Jones,  $8;  James  Marshall,  $12;  Albert  Handley,  $15. 
Sell  to  Wagner  &  Johnson,  on  %,  4  bbls.  syrup,  215  gals,  at  320  per  gal.,  2  bbls.  N.  O.  Molasses, 
108  gals,  at  320  per  gal.,  5  sacks  rice  at  $2.05  per  sack. 

Pay  for  10  tons  coal  for private  residence,  $45. 

(Student's  name) 

Cash  sales,  $168.27. 

28. 

Receive  check  from  Otto  Tielman  for  $350  on  %. 

Sell  Hayes  &  Nurff,  4  bbls.  vinegar,  209  gals,  at  60  per  gal.,  12  doz.  cans  salmon  at  $1.05  per 
doz. 

Cash  sales,  $98.45. 

29. 

Receive  from  Boyer  &  Co.,  check  for  $50  on  %. 
Pay  drayage,  $3.50. 
Pay  for  advertising,  $45. 

Sell  Miller  &  Hartmann,  on  %,  12  cases  Uneeda  Biscuit  at  $2  per  case,  24  doz.  cans  corn  at 
750  per  doz.,  2  bbls.  syrup,  104  gals.,  at  320  per  gal.,  5  boxes  starch  at  $2  per  box. 
Cash  sales,  $125.32. 

30. 

Send  check  to  John  Schoenewolf  &  Co.,  for  $53  in  full  of  account. 

Sell  Reitz  Bros.,  on  %,  12  doz.  Extract  Lemon  at  75^  per  doz.,  12  doz.  Extract  Vanilla  at  $2 
per  doz.,  10  bbls.  apples  at  $2.50  per  bbl.,  10  bbls.  granulated  sugar  3,440  lbs,,  at  5fj6  per  lb. 
Cash  sales,  $350.25. 

31. 

Send  National  Biscuit  Co.,  check  for  $325  on  %. 

Receive  from  Bryant  &  Clarvoe,  check  for  $160  on  %. 

Receive  from  Cooper  Bros.,  check  for  $120  on  %. 
'   Credit  each  of  the  traveling  salesmen  and  each  partner  with  his  salary. 

Credit  partners  for  interest  on  investments. 

Inventories : 

Merchandise $13,940.50 

Store  and  Office  Fixtures 825.00 

The  books  are  now  to  be  closed. 

WRITTEN  TEST  NO.  14. 

1.  When  is  Discount  and  Interest  debited?  Credited? 

2.  What  other  accounts  will  this  rule  apply  to? 

3.  Discount  and  Interest  is  closed  into  what  account? 

4.  What  is  accrued  interest?    Is  it  a  resource  when  owed  to  us? 

5.  If  no  rate  of  interest  is  given,  what  rate  should  be  used?    Why? 

6.  How  many  times  may  a  note  be  transferred?    How  is  it  transferred? 

7.  If  a  note  is  not  paid  when  due,  what  is  usually  done?    Why? 

8.  When  are  the  words  "no  protest"  used,  and  why? 

9.  When  resources  and  liabilities  are  both  invested,  what  entry  is  made? 

10.  If  the  proprietor  is  just  beginning,  how  can  he  have  both  resources  and  liabilities? 

11.  How  would  you  proceed  with  a  bill  for  Mdse.  received,  before  writing  O.K.  upon  it? 

12.  Why  should  Mdse.  sold  be  itemized  in  the  journal  or  sales  book? 

13.  Why  should  a  receipt  be  taken  when  cash  is  paid  for  any  purpose? 

14.  How  do  you  find  the  amount  of  cash  on  hand? 


174        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

.   15.  How  do  you  find  the  amount  of  Mdse.  bought?     The  amount  sold?    The  amount  ou 
hand? 

16.  What  is  a  bank? 

17.  Name  some  of  the  advantages  gained  by  keeping  an  account  with  a  bank. 

18.  What  is  a  bank  Pass  Book  and  who  makes  the  entries  in  this  book? 

19.  Where  should  the  endorsement  of  a  check  appear? 

20.  What  is  a  "blank"  endorsement?  Full  endorsement?  Draw  forms.  Restrictive 
endorsement?    Depositor's  endorsement? 

21.  Why  should  pencil  totals  be  written  in  small  figures  right  up  against  the  last  used  line? 

22.  On  which  side  of  the  Ledger  account  would  you  perform  the  subtraction  between  the 
sides? 

SET  7. 

WHOLESALE    GROCERY    BUSINESS — CONTINUED. 

FEBRUARY  1,  19—. 

Keep  your  money  in  Bank  in  the  following  set;  make  daily  deposits,  prove  cash,  etc.,  as  you 
handled  it  in  the  second  part  of  Set  5. 

197.  Open  a  Bank  account  in  the  Ledger,  treating  it  the  same  as  any  other  personal  account, 
i.e.  debit  the  Bank  and  credit  Cash  for  all  deposits  made;  credit  the  Bank  through  the  Journal  for 
all  checks  drawn,  except  those  drawn  to  get  cash  out  of  bank  for  the  Pay  Roll.  The  amount  of 
Pay  Roll  checks  will  be  entered  on  the  debit  side  of  the  Cash  Book  and  posted  from  there  to  the 
credit  of  the  Bank. 

When  an  account  is  kept  with  the  bank  in  the  Ledger,  the  balance  of  the  Cash  Book  will 
show  the  amount  of  cash  in  the  cash  drawer.  Keeping  an  account  with  the  bank  in  the  Ledger  in 
addition  to  the  account  kept  on  the  back  of  the  Check  Book  stub  enables  a  large  concern,  drawing 
many  checks  daily,  to  locate  more  easily  the  errors  that  are  sure  to  happen  at  times. 

Sell  to  Otto  Tielman  &  Son,  on  %,  3  bbls.,  160  gals.,  N.  O.  molasses  at  32c1  per  gal.,  5  bags 
coffee,  110  lbs.  each,  at  13c1  per  lb.,  12  doz.  bottles  pepper  sauce,  at  65^  per  doz. 

Sell  Baker  &  Co.,  on  %,  15  bbls.  5,146  lbs.,  gran,  sugar,  at  5f^  per  lb.,  25  hams,  263  lbs.,  at 
12|^  per  lb.,  10  boxes  crackers  at  $1.50  per  box,  5  boxes  ginger  snaps  at  $1.60  per  box. 

Buy  from  Ed.  L.  Palmer  &  Co.,  on  %,  75  cases  Quaker  Oats  at  $2  per  case,  50  bbls.,  2,675 
gals.,  N.  O.  molasses  at  25^  per  gal. 

Sell  to  Reitz  Bros.,  on  %,  12  bbls.  GambrilPs  Best  Flour  at  $4.40  per  bbl.,  6  boxes  Ivory  Soap 
at  $6  per  box,  25  lbs.  boneless  codfish  at  6jj£  per  lb. 

Sell  to  C.  Walburn,  on  %,  12  boxes  Snow  Flake  Starch  at  $2  per  box,  3  boxes  lemons  at  $2.50 
per  box,  100  lbs.  Rio  Coffee  at  21^  per  lb. 

Receive  from  Miller  &  Hartman,  on  %,  check  for  $150. 

Pay  C.  A.  Gambrill  Mfg.  Co.,  on  %,  $200. 

A.  E.  Trader  withdraws  $5,000  cash,  from  the  business,  for  the  purpose  of  reducing  his 
investment. 

Cash  sales,  $147.60. 

2. 

Fred.  Baker,  salesman,  draws  $15  for  expenses. 

Receive  from  J.  B.  Friday  &  Co.,  in  settlement  of  account,  note  for  $83.81,  dated  Feb.  1,  19 — , 
due  in  60  days. 

Sell  to  William  Jackson,  on  %,  12  doz.  cans  string  beans  at  50^  per  doz.,  5  boxes  prunes  at 
$1.80  per  box,  2  boxes  figs  at  $1  per  box. 

Sell  to  Robert  Jones  &  Co.,  on  %,  5  bbls.,  1,718  lbs.,  gran,  sugar  at  h\i  per  lb.,  3  bags,  100  lbs. 
each,  E.  L.  O.  Coffee  at  15^  per  lb.,  8  cheese,  60  lbs.  each,  at  12^  per  lb.,  10  doz.  cans  preserved 
strawberries  at  $1.50  per  doz. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        175 

Sell  to  Wagner  &  Johnson,  on  %,  18  California  hams,  144  lbs.,  at  8fj£  per  lb.,  160  gals,  cider 
vinegar  at  6j£  per  gal.,  15  bbls.  prime  apples  at  $2.50  per  bbl. 
Pay  John  Jones'  salary  for  the  week,  $8. 
Pay  James  Marshall's  salary  for  the  week,  $12. 
Pay  Albert  Handley's  salary  for  the  week,  $15. 
Cash  sales,  $148.30. 

4. 


Pay  store  rent  for  the  month, 

Sell  Boyer  &  Co.,  on  %,  15  doz.  cans  Eagle  Brand  Corn  at  75j£  per  doz.,  20  bbls.  Superior 
Family  Four  at  $4  per  bbl. 

Sell  to  McGaw  &  Co.,  on  %,  8  bbls.  oyster  crackers  at  $1.50  per  bbl.,  12  cases  Uneeda  Biscuit 
at  $2  per  case,  3  bbls.,  162  gals.,  Porto  Rico  Molasses  at  35^  per  gal. 

Sell  to  Jordan  Stabler  Co.,  on  %,  25  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  24  doz. 
cans  Enterprise  Tomatoes  at  75^  per  doz.,  5  bags  Java  and  Mocha  Coffee,  100  lbs.  each,  at  30^  per 
lb.,  60  lbs.  Green  Tea  at  51f$  per  lb. 

Receive  from  Baker  &  Co.,  on  %,  bank  draft  for  $625. 

Robert  West  draws  for  expenses,  $15. 

Sell  C.  P.  Kreamer,  for  cash,  bill  of  Mdse.  amounting  to  $67.50. 

A.  E.  Trader  draws  $40  for  private  use. 

Cash  sales,  $160.28. 

5. 

Send  note  at  30  days  to  Woolson  Spice  Co.,  for  $525. 

Sell  Hayes  &  Nurff,  on  %,  25  doz.  cans  salmon  at  $1.05  per  doz.,  24  doz.  cans  Crawford 
Peaches  at  $1.85  per  doz.,  150  lbs.  mackerel  at  12^  per  lb. 

Sell  Maynadier  &  Co.  on  %,  25  bbls.  prime  apples  at  $2.50  per  bbl.,  35  bbls.,  1,160  gals., 
Goldenrod  Syrup  at  32^  per  gal. 

Buy  from  P.  D.  Armour  &  Co.,  on  %,  1,246  lbs.  ham  at  §\i  per  lb. 

Receive  from  L.  W.  Johnson  on  %,  check  for  $200. 

Draw  sight  drafts  on  the  following: 

Maynadier  &  Company,  $100.00,  Frank  Reist,  $100.00,  Hayes  &  Nurff,  $100.00,  and  Reitz 
Bros.,  $100.00,  and  send  them  to  H.  A.  Edmondson  &  Company  to  apply  on  account. 

Sell  Bryant  &  Clarvoe,  on  %,  4  bags  Rio  Coffee,  100  lbs.  each,  at  21^  per  lb.,  6  cases  Uneeda 
Biscuit  at  $2  per  case,  18  doz.  cans  selected  peas  at  $1.15  per  doz. 

Charles  Saum  draws  $15  for  expenses. 

Pay  freight  on  goods,  B.  &.  O.  R.  R.,  $3.45. 

Pay  for  postage  and  stationery,  $5. 

Cash  sales,  $163.72. 

6. 

Sell  J.  C.  Bailey,  on  %,  12  boxes  American  Macaroni  at  $1.50  per  box,  6  cheese,  60  lbs.  each, 
at  12|^  per  lb.,  150  lbs.  Carolina  Rice  at  4^  per  lb.,  50  lbs.  Wild  Pepper  at  18^  per  lb. 

Sell  Charles  Carter,  on  %,  3  bbls.,  162  gals.,  N.  O.  Molasses  at  32^  per  gal.,  5  doz.  bottles 
Choice  Pickles  at  $1  per  doz.,  3  doz.  bottles  household  ammonia  at  $1.40  per  doz. 

Receive  from  Jordan  Stabler  Co.,  on  %,  bank  draft  for  $350. 

Buy  from  Woolson  Spice  Co.,  on  %,  100  bags  coffee,  100  lbs.  each,  at  18^  per  lb. 

Sell  Frank  Reist,  on  %,  12  bbls.,  4,123  lbs.  granulated  sugar  at  5ff£  per  lb.,  5  boxes  Ivory  Soap 
(large  size)  at  $6  per  box. 

Fred.  Baker  draws  $25  on  his  salary. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  12  doz.  cans  Eagle  Brand  Corn  at  75j£  per  doz.,  6  cheese, 
60  lbs.  each,  at  12^  per  lb.,  3  boxes  ginger  snaps,  at  $1.60  per  box,  4  boxes  starch,  at  $2  per  box. 

Cash  sales,  $170.15. 


176        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

7. 

Pay  for  printing  letter-heads  and  bill-heads,  $5. 

Sell  to  S.  N.  Bloom  &  Co.,  Hagerstown,  Md.,  on  %,  15  bbls.  5,148  lbs.,  granulated  sugar  at 
5f)£  per  lb.,  20  doz.  cans  peaches  at  $1.85  per  doz.,  15  doz.  cans  salmon  at  $1.05  per  doz.,  10  lbs. 
cloves  at  15c1  per  lb. 

Receive  from  Otto  Tielman  &  Son,  on  %,  check  for  $225. 

Sell  to  William  Jackson,  on  %,  12  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  3  bbls.  1,029 
lbs.,  brown  sugar  at  5j£  per  lb. 

Sell  to  Miller  &Hartman,  on  %,  36  hams,  367  lbs.,  at  12^  per  lb.,  18  Prime  cheese,  60  lbs.  each, 
at  12^  per  lb.,  24  doz.  cans  Enterprise  Corn  at  75j£  per  doz.,  12  boxes  ginger  snaps  at  $1.60  per 
box. 

Receive  from  Wagner  &  Johnson,  on  %,  bank  draft  for  $150. 

Sell  to  Gold  Bros.,  on  %,  5  bbls.,  1,718  lbs.,  granulated  sugar  at  5fe'  per  lb.,  2  bags  Rio 
Coffee,  100  lbs.  each,  at  21^  per  lb.,  25  lbs.  boneless  codfish  at  6|j£  per  lb. 

Cash  sales,  $180.65. 

8. 

Receive  from  Robert  Jones  &  Co.,  on  %,  their  note  for  $234.99,  dated  Columbus,  S.  C,  Feb. 
5,  19 — ,  due  60  days  from  date. 

Pay  Woolson  Spice  Co.,  on  %,  $1,000. 

Robert  West  draws  $30  on  his  salary. 

Sell  to  Cooper  Bros.,  on  %,  15  bbls.,  5,148  lbs.,  granulated  sugar  at  5f^  per  lb.,  5  bbls.,  265 
gals.,  N.  O.  Molasses,  at  32^  per  gal.,  12  bbls.  oyster  crackers  at  $1.50  per  bbl.,  12  boxes  ginger 
snaps  at  $1.60  per  box,  20  cheese,  60  lbs.  each,  at  12|j£  per  lb. 

Sell  to  McGaw  &  Co.,  on  %,  24  doz.  cans  string  beans  at  50j£  per  doz.,  12  doz.  cans  Marrow- 
fat Peas  at  $1.15  per  doz. 

Sell  to  L.  W.  Johnson,  on  %,  12  hams,  126  lbs.,  at  12|^  per  lb.,  12  sacks  ground  alum  salt  at 
$1.50  per  sack,  5  boxes  lemons  at  $2.50  per  box. 

Draw  a  draft  at  thirty  days  after  date  on  Charles  Carter  for  $200.00,  and  send  same  to  Wool- 
son  Spice  Company  to  apply  on  account. 

Sell  to  C.  Walburn  &  Co.,  on  %,  15  bbls.,  5,150  lbs.,  granulated  sugar,  at  5f  j£  per  lb.,  8  bbls., 
325  gals.,  syrup  at  32^  per  gal. 

Pay  freight  on  goods,  P.  R.  R.,  $5.40. 

Cash  sales,  $186.50. 

9. 

Send  check  to  C.  A.  Gambrill  Mfg.  Co.,  on  %,  for  $44.50. 

Buy  from  J.  A.  Edmondson  &  Son,  on  %,  50  bbls.  syrup,  2,675  gals.,  at  25^  per  gal.,  100  bbls. 
granulated  sugar,  34,380  lbs.,  at  5H  per  lb. 

Sell  to  Reitz  Bros.,  on  %,  8  cheese,  60  lbs.  each,  at  12^  per  lb.,  4  bags  coffee,  100  lbs.  each, 
at  26j£  per  lb.,  12  doz.  cans  Enterprise  Tomatoes  at  75c1  per  doz.,  50  lbs.  dried  peaches  at  12^  per  lb. 

Receive  from  Hayes  &  Nurff,  on  %,  their  note  for  $127,  dated  Atlanta,  Ga.,  Feb.  6,  19 — , 
due  30  days  from  date  with  interest  at  6%. 

Pay  Charles  Saum,  on  salary,  $35. 

Sell  to  J.  N.  Frantz,  Hancock,  Va.,  on  %,  3  bbls.,  162  gals.,  syrup  at  32^  per  gal.,  12  bbls. 
Russet  Apples  at  $2.50  per  bbl. 

Sell  to  F.  W.  Wagner  &  Co.,  Raleigh,  N.  C,  on  %,  25  bbs.,  8,491  lbs.,  granulated  sugar  at  5U 
per  lb.,  10  cases  Uneeda  Biscuit  at  $2  per  case,  25  lbs.  raisins  at  10^  per  lb. 

Pay  John  Jones  his  salary  for  the  week,  $8. 

Pay  James  Marshall  his  salary  for  the  week,  $12. 

Pay  Albert  Handley  his  salary  for  the  week,  $15. 

Cash  sales,  $188.43. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        177 

11. 

Buy  from  Thomas  G.  Cranwell  &  Co.,  on  %,  100  doz.  cans  Eagle  Brand  corn  at  57|^  per  doz., 
80  doz.  cans  Marrowfat  Peas  at  75j£  per  doz.,  100  doz.  cans  Enterprise  Tomatoes  at  57|^  per  doz. 

Sell  Baker  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  2  bbls.  mackerel 
at  $18  per  bbl.,  24  cases  Quaker  Oats  at  $2  per  case. 

Sell  to  Boyer  &  Co.,  on  %,  2  bbls.  mackerel  at  $18  per  bbl.,  5  bbls.,  1,728  lbs.,  granulated 
sugar  at  5f^  per  lb.,  4  bags  Java  and  Mocha  Coffee,  100  lbs.  each,  at  30%fi  per  lb. 

Receive  from  Bryant  &  Clarvoe,  on  %,  check  for  $150. 

Robert  West   draws,   for  expenses,   $15. 

Sell  to  Jordan  Stabler  Co.,  on  %,  15  sacks  ground  alum  salt  at  $1.50  per  sack,  24  doz.  bottles 
choice  pickles  at  $1  per  doz.,  24  doz.  bottles  olives  at  $1.85  per  doz.,  5  boxes  California  Prunes  at 
$1.80  per  box. 

Sell  to  Robert  Jones  &  Co.,  on  %,  12  hams,  126  lbs.,  at  12|^  per  lb.,  3  boxes  lemons  at  $2.50 
per  box,  12  doz.  bottles  pepper  sauce  at  65c1  per  doz. 

Fred.  Baker  draws  $30  on  his  salary. 

Receive  from  S.  N.  Bloom  &  Co.,  on  %,  their  note  for  $350.26,  dated  Hagerstown,  Md.,  Feb. 
9,  19 — ,  at  60  days  with  interest  at  6%. 

Cash  sales,  $192.25. 

12. 

Send  check  to  Edward  L.  Palmer  &  Co.,  on  %,  for  $1,000. 

Buy  from  John  Schoenewolf  &  Co.,  on  %,  5  bbls.,  2*67  gals.,  pure  cider  vinegar  at  5^  per  gal. 

Sell  to  Otto  Tielman  &  Son,  on  %,  10  bbls.,  3,435  lbs.,  granulated  sugar  at  5f^  per  lb.,  10  cases 
Quaker  Oats  at  $2.25  per  case,  5  boxes  crackers  at  $1.50  per  box. 

Sell  to  Wagner  &  Johnson,  on  %,  12  bbls.,  4,126  lbs.,  granulated  sugar  at  5f^  per  lb.,  24  doz. 
cans  Enterprise  Tomatoes  at  75^  per  doz.,  5  sacks  Carolina  Rice  at  $2.05  per  sack. 

The  thirty-day  draft,  which  we  drew  February  8th  on  Charles  Carter  in  favor  of  Woolson 
Spice  Company,  was  returned  by  the  latter  along  with  the  statement  that  Carter  had  refused  to 
accept.  We  send  Woolson  Spice  Company  a  new  draft  at  twenty  days'  sight  on  Maynadier  & 
Company  for  the  amount  of  the  returned  draft. 

Sell  to  Hayes  &  Nurff,  on  %,  24  hams,  250  lbs.,  at  12|^  per  lb.,  5  cases  Uneeda  Biscuit  at  $2 
per  case. 

Charles  Saum  draws  for  expenses,  $15. 

Pay  freight  on  goods,  P.  W.  B.  R.  R.,  $3.45. 

Cash  sales,  $201.20. 

13. 

Sell  to  Charles  Carter,  Martinsburg,  W.  Va.,  on  %,  10  boxes  Proctor  &  Gamble's  Soap  at 
$2.45  per  box;  5  sacks  coffee,  100  lbs.  each,  at  26j£  per  lb.,  3  boxes  figs  at  $1  per  box. 

Sell  to  J.  T.  Bailey,  on  %,  12  doz.  bottles  household  ammonia  at  $1.40  per  doz.,  18  hams,  189 
lbs.,  at  12|^  per  lb.,  8  bbls.,  1,546  lbs.,  granulated  sugar,  at  5\£  per  lb. 

Sell  to  Maynadier  &  Co.,  on  %,  10  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  8  boxes  Ivory 
Soap  (large  size)  at  $6  per  box. 

Receive  from  Gold  Bros.,  on  %,  check  for  $225. 

Albert  Handley  draws  $8  on  his  salary. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  50  bbls.,  2,645  gals.,  syrup  at  25j£  per  gal. 

Sell  to  E.  C.  Shull,  on  %,  10  cases  Uneeda  Biscuit  at  $2  per  case,  12  cheese,  60  lbs.  each,  at 
12| j£  Per  lb.,  5  boxes  California  Prunes  at  $1.80  per  box,  6  doz.  bottles  prime  olives  at  $1.85  per 
doz. 

Sell  to  Bryant  &  Clarvoe,  on  %,  18  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  8  boxes 
Ivory  Soap  at  $6  per  box. 

Pay  sight  draft  of  Thomas  G.  Cranwell  &  Co.,  for  $175. 

Cash  sales,  $197.67. 


178        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

14. 

Receive  from  William  Jackson,  on  %,  his  note  for  $224.91,  dated  Baltimore,  Md.,  Feb.  14, 
19 — ,  due  90  days  from  date  with  6  %  interest. 

Buy  from  Woolson  Spice  Co.,  on  %,  200  bags  coffee,  100  lbs.  each,  at  18|^  per  lb. 

Buy  from  John  Schoenewolf  &  Co.,  on  %,  50  bbls.  syrup,  1,653  gals.,  at  32^  per  gal.,  25  bbls. 
vinegar,  1,329  gals.,  at  5^  per  gal. 

Sell  Gold  Bros.,  on  %,  12  bbls.  Superior  Flour  at  $4  per  bbl.,  5  cases  Uneeda  Biscuit  at  $2  per 
case,  12  hams,  125  lbs.,  at  12|^  per  lb.,  10  doz.  cans  salmon  at  $1.05  per  doz. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  5  bbls.,  1720  lbs.,  granulated  sugar  at  5f £  per  lb.,  25  lbs. 
Green  Tea  at  51^  per  lb.,  3  bbls.,  160  gals,  cider  vinegar  at  6j£  per  gal. 

Receive  from  Gold  Bros.,  on  %,  check  for  $142.33. 

Pay  drayage  to  date,  $12.75. 

Pay  one  year's  subscription  to  the  "Baltimore  American,"  $3. 

Cash  sales,   $205.40. 

15. 

Pay  sight  draft  on  us  by  Schriver,  Bentley  &  Co.,  for  $725. 

Buy  from  National  Biscuit  Co.,  on  %,  100  cases  Uneeda  Biscuit  at  $1.75  per  case,  75  boxes 
crackers  at  $1.25  per  box,  75  boxes  ginger  snaps  at  $1.30  per  box. 

Sell  to  S.  N.  Bloom  &  Co.,  on  %,  12  cheese,  60  lbs.  each,  at  12|(i  per  lb.,  5  boxes  lemons  at 
$2.50  per  box,  100  cocoanuts  at  $3.24  per  100. 

Sell  to  J.  N.  Frantz,  on  %  12  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  12  doz.  Eagle 
Brand  Corn  at  75^  per  doz.,  10  doz.  bottles  pepper  sauce  at  65j£  per  doz.,  6  boxes  crackers  at  $1.50 
per  box. 

Robert  West  draws  $15  on  his  salary. 

Pay  plumber's  bill  for  A.  E.  Trader,  $45.80. 

Sell  to  Charles  Diffendall  &  Co.,  on  %,  10  cases  Uneeda  Biscuit  at  $2  per  case,  15  bbls.  choice 
apples  at  $2.50  per  bbl.,  10  doz.  bottles  Heinz's  Pickles  at  $1  per  doz. 

Receive  from  Reitz  Bros.,  on  %,  their  note  for  $179,  dated  Baltimore,  Md.,  Feb.  14,  19 — ,  due 
60  days  after  date. 

Sell  Cooper  Bros.,  on  %,  5  bbls.  mackerel  at  $18  per  bbl.,  5  bbls.  herring  at  $2  per  bbl. 

Cash  sales,  $200.96. 

16. 

Receive  from  McGaw  &  Co.,  on  %,  bank  draft  for  $230. 

Sell  to  Baker  &  Co.,  on  %,  24  doz.  cans  choice  peas  at  $1.15  per  doz.,  5  bags  coffee,  100  lbs. 
each,  at  26^  per  lb.,  60  lbs.  Green  Tea  at  51^  per  lb. 

Sell  to  L.  W.  Johnson,  on  %,  5  bbls.  GambrilTs  Best  Flour  at  $4.40  per  bbl. 

Sell  to  C.  Walburn  &  Co.,  on  %,  24  hams,  10?  lbs.  each,  at  12|^  per  lb.,  12  doz.  cans  Crawford 
Peaches  at  $1.85  per  doz.,  10  bbls.  choice  apples  at  $2.50  per  bbl.,  3  bbls.  herring  at  $2  per  bbl. 

Buy  from  John  Schoenewolf  &  Co.,  on  %,  20  bbls.  cider  vinegar,  1,070  gals.,  at  5^  per  gal. 

Pay  freight  on  goods,  B.  &  O.  R.  R.,  $5.65. 

Sell  to  F.  W.  Wagner  &  Co.,  on  %,  20  bbls.  Superior  Flour  at  U  per  bbl.,  12  cheese,  60  lbs. 
each,  at  12^  per  lb.,  10  boxes  crackers  at  $1.50  per  box. 

Pay  salaries,  John  Jones,  $8;  John  Marshall,  $12;  Albert  Handley,  balance  on  salary,  $7. 

Cash  sales,  $198.25. 

18. 

Sell  to  Boyer  &  Co.,  on  %,  18  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  8  boxes  crackers 
at  $1.50  per  box,  3  boxes  lemons  at  $2.50  per  box,  5  cases  Uneeda  Biscuit  at  $2  per  case,  2  bbls. 
pure  cider  vinegar,  53  and  55  gals.,  at  5j£  per  gal. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         179 

Sell  to  Miller  &  Hartman,  on  %,  18  bbls.,  6,178  lbs.,  granulated  sugar  at  5|^  per  lb.,  12  cases 
Uneeda  Biscuit  at  $2  per  case. 

Receive  from  C.  Walburn  &  Co.,  on  %,  check  for  $500. 

Pay  to  J.  A.  Edmondson  &  Son,  on  %,  $550. 

Buy  from  Thomas  G.  Cranwell,  on  %,  200  boxes  Ivory  Soap  at  $4.50  per  box,  100  doz.  cans 
tomatoes  at  57^  per  doz.,  100  doz.  cans  peaches  at  $1.85  per  doz.,  100  doz.  cans  peas  at  90jf  per 
doz. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  %,  100  bbls.  GambrilFs  Best  Flour  at  $4  per  bbl. 

Sell  to  Robert  Jones  &  Co.,  on  %,  24  doz.  cans  Eagle  Brand  Corn  at  75^  per  doz.,  24  doz.  cans 
Enterprise  Tomatoes  at  75c"  per  doz.,  12  boxes  crackers  at  $1.50  per  box. 

Sell  to  Jordan  Stabler  Co.,  on  %,  24  doz.  cans  choice  peas  at  $1.15  per  doz.,  24  doz.  cans  Craw- 
ford Peaches  at  $1.85  per  doz.,  12  bbls.  herring  at  $2  per  bbl. 

Charles  Saum  draws  $15  on  his  salary. 

Pay  drayage  to  date,  $5.25. 

Cash  sales,  $210. 

19. 

Receive  from  Cooper  Bros.,  on  %,  bank  draft  for  $572.45. 

Receive  from  J.  C.  Bailey,  check  for  his  bills  of  the  6th  and  13th  instant,  less  2%  discount  on 
latter. 

Sell  to  Hayes  &  Nurff,  on  %,  12  bbls.,  4,126  lbs.,  granulated  sugar  at  5f  jf  per  lb.,  18  cheese,  60 
lbs.  each,  at  12^  per  lb.,  5  bbls.,  268  gals.,  syrup  at  32c'  per  gal.,  2  bbls.,  52  and  54  gals.,  vinegar  at 
6c1  per  gal. 

Sell  Wagner  &  Johnson,  on  %,  5  bags  Java  and  Mocha  Coffee,  100  lbs.  each,  at  30jzf  per  lb.,  2 
boxes  lemons  at  $2.50  per  box. 

Receive  from  Boyer  &  Co.,  on  %,  their  note,  dated  Feb.  19,  19 — ,  for  $153.05,  due  30  days 
from  date  with  6%  interest. 

Sell  to  Otto  Tielman  &  Son,  on  %,  12  cases  Uneeda  Biscuit  at  $2  per  case,  10  doz.  cans  Enter- 
prise Tomatoes  at  75j£  per  doz.,  5  doz.  bottles  household  ammonia  at  $1.40  per  doz. 

Cash  sales,  $204.85. 

20. 

Buy  from  Williamson  Creamery  Co.,  on  %,  100  cheese,  60  lbs.  each,  at  12|j£  per  lb. 

Pay  sight  draft  for  $393.75,  drawn  on  us  by  the  National  Biscuit  Co. 

Sell  to  Charles  Carter,  on  %,  12  bbls.,  4,125  lbs.,  granulated  sugar  at  5fj£  per  lb.,  10  doz.  cans 
salmon  at  $1.05  per  doz. 

Sell  to  E.  C.  Shull,  Columbia,  S.  C,  on  %,  12  hams,  10|  lbs.  each,  at  12^  per  lb.,  5  boxes 
crackers  at  $1.50  per  box. 

Receive  from  Maynadier  &  Co.,  on  %,  check  for  $113.70. 

Sell  to  William  Jackson,  on  %,  10  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz.,  5  boxes 
lemons  at  $2.50  per  box,  3  bags  Rio  Coffee,  100  lbs.  each,  at  21j£  per  lb. 

Sell  to  Bryant  &  Clarvoe,  on  %,  12  doz.  cans  Crawford  Peaches  at  $1.85  per  doz.,  20  bu.  pota- 
toes at  60^  per  bu.,  5  cans  refined  lard,  50  lbs.  each,  at  9^  per  lb. 

Sell  to  Reitz  Bros.,  on  %,  8  boxes  crackers  at  $1.50  per  box,  6  boxes  ginger  snaps  at  $1.60  per 
box. 

Cash  sales,  $198.15. 

21. 

Sell  to  Gold  Bros.,  on  %,  24  doz.  cans  Eagle  Brand  Tomatoes  at  75^  per  doz.,  12  cheese,  60 
lbs.  each,  at  12^  per  lb.,  12  doz.  cans  preserved  strawberries  at  $1.50  per  doz. 

Sell  to  J.  N.  Frantz,  on  %,  18  hams,  10?  lbs.  each,  at  12|^  per  lb.,  5  boxes  Proctor  &  Gamble's 
Soap  at  $2.45  per  box. 


180        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Pay  sight  draft  drawn  on  us  by  Woolson  Spice  Co.,  for  $785. 

Receive  from  Charles  Carter,  on  %,  check  for  $61.04. 

Buy  from  P.  D.  Armour  &  Co.,  on  %,  75  hams,  790  lbs.,  at  §\ft  per  lb. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  3  bags  coffee,  100  lbs.  each,  at  2Qft  per  lb.,  5  boxes  Ivory 
Soap  at  $6  per  box,  6  boxes  lemons  at  $2.50  per  box. 

Sell  to  F.  W.  Wagner  &  Co.,  on  %,  24  doz.  cans  choice  peas  at  $1.15  per  doz.,  6  boxes  Proctor 
&  Gamble's  Soap  at  $2.45  per  box,  3  bbls.,  54,  55,  and  53  gals.,  syrup  at  32$*  per  gal.,  5  bbls.  brown 
sugar,  1,720  lbs.,  at  5ft  per  lb. 

Cash  sales,  $203.44. 

22. 

Receive  from  Miller  &  Hartman,  on  %,  check  for  $565. 

Robert  West  draws,  for  expenses,  $15. 

Pay  freight  on  goods,  B.  &  O.  R.  R.,  $4.75. 

Sell  to  L.  W.  Johnson,  on  %,  10  doz.  cans  salmon  at  $1.05  per  doz.,  3  bbls.  mackerel  at  $18 
per  bbl.,  15  bbls.  choice  apples  at  $2.50  per  bbl. 

Sell  to  Baker  &  Co.,  on  %,  30  doz.  cans  Eagle  Brand  Corn  at  75ft  per  doz.,  24  doz.  cans  Craw- 
ford Peaches,  at  $1.85  per  doz. 

Receive  from  Jordan  Stabler  Co.,  on  %,  check  for  $99.90  for  bill  of  the  9th  instant. 

Sell  to  McGaw  &  Co.,  on  %,  3  bbls.,  160  gals,  cider  vinegar  at  Qft  per  gal.,  5  boxes  ginger  snaps 
at  $1.60  per  box,  3  bbls.  herring  at  $2  per  bbl. 

Sell  to  Maynadier  &  Co.,  on  %,  8  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  3  bbls.  crackers 
at  $1.50  per  bbl.,  4  bags  coffee,  100  lbs.  each,  at  26^  per  lb. 

draws  $75  for  private  use. 

(Student's  name) 

Cash  sales,  $210.60. 

23. 

Sell  to  S.  N.  Bloom  &  Co.,  on  %,  8  bags  Rio  Coffee,  100  lbs.  each,  at  2\ft  per  lb.,  5  bbls.  crackers 
at  $1.50  per  bbl.,  10  cases  Uneeda  Biscuit  at  $2  per  case,  3  boxes  figs  at  $1  per  box. 

Receive  from  E.  C.  Shull,  on  %,  note  for  $153.35,  dated  Columbia,  S.  C,  Feb.  22,  19—,  due 
6  months  after  date. 

Sell  to  Jordan  Stabler  Co.,  on  %,  15  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  20  bbls., 
6,873  lbs.  granulated  sugar  at  5jft  per  lb. 

Sell  to  C.  Walburn  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  8  boxes 
Proctor  &  Gamble's  Soap  at  $2.45  per  box,  100  cocoanuts  at  $3.25  per  100,  5  boxes  crackers  at 
$1.50  per  box. 

Sell  to  Miller  &  Hartman,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  15ft  per  doz.,  25  sacks 
ground  alum  salt  at  $1.50  per  sack,  12  boxes  Ivory  Soap  at  $6  per  box. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  75  bbls.,  3,975  gals,  syrup  at  25ft  per  gal. 

Buy  from  Thomas  G.  Cranwell  &  Co.,  on  %,  100  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz. 

Pay  John  Jones  week's  salary,  $8. 

Pay  James  Marshall  week's  salary,  $12. 

Pay  Albert  Handley  week's  salary,  $15. 

Cash  sales,  $209.15. 

25. 

Pay  draft  of  C.  A.  Gambrill  Mfg.  Co.,  for  bill  of  18th  instant  less  discount,  $392. 

Receive  from  Jordan  Stabler  Co.,  on  %,  check  for  $446.10  for  bill  of  the  23rd.  instant  less 
2%. 

Sell  to  Robert  Jones  &  Co.,  on  %,  5  bbls.,  265  gals.,  syrup  at  32ft  per  gal.,  25  sacks  fine  salt  at 
$1.50  per  sack,  5  boxes  ginger  snaps  at  $1.60  per  box. 

Sell  Otto  Tielman  &  Son,  on  %,  12  boxes  Ivory  Soap  at  $6  per  box,  24  hams,  10£  lbs.  each, 
at  12#  per  lb. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        181 

Receive  from  Baker  &  Co.,  on  %,  check  for  $453.78. 

Pay  drayage  on  goods  to  date,  $3.75. 

Sell  to  Cooper  Bros.,  on  %,  100  sacks  fine  salt  at  $1.50  per  sack,  20  boxes  Proctor  &  Gamble's 
Soap  at  $2.45  per  box,  15  bbls.,  5,146  lbs.,  brown  sugar  at  5j£  per  lb.,  24  hams,  10|  lbs.  each,  at  12^ 
per  lb.,  12  boxes  ginger  snaps  at  $1.60  per  box. 

Pay  Fred  Baker  $30  for  expenses. 

Sell  to  C.  P.  Kreamer  for  cash,  36  hams,  10|  lbs.  each,  at  12^  per  lb.,  8  bbls.  herring  at  $2 
per  bbl. 

Pay  6  months'  house  rent  for  A.  E.  Trader,  $375. 

Cash  sales,  $216.30. 

26. 

Send  note  at  60  days  with  interest  at  6%  to  Schriver,  Bentley  &  Co.,  for  $1,000  to  be  applied 
on  account. 

Sell  to  Charles  Diffendall  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz.,  15 
bbls.,  5,165  lbs.,  granulated  sugar,  at  5f^  per  lb. 

Receive  from  F.  W.  Wagner  &  Co.,  their  note  for  $875.87  in  full  of  account,  dated  Raleigh, 
N.  C,  Feb.  24,  19—,  due  90  days  from  date. 

Sell  to  Wagner  &  Johnson,  on  %,  24  doz.  Eagle  Brand  Corn  at  75j£  per  doz.,  100  cocoanuts  at 
$3.25  per  100,  12  boxes  crackers  at  $1.50  per  box,  10  boxes  ginger  snaps  at  $1.60  per  box. 

Sell  to  Hayes  &  Nurff,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz.,  6  boxes  starch 
at  $2  per  box,  10  boxes  Ivory  Soap  at  $6  per  box. 

Receive  from  S.  N.  Bloom,  on  %,  check  for  $225. 

Charles  Saum  draws  $15  for  expenses. 

Sell  Reitz  Bros,  on  %,  15  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  12  cases  Uneeda  Biscuit 
at  $2  per  case,  6  boxes  lemons  at  $2.50  per  box. 

The  thirty-day  draft  of  the  24th  ultimo  on  Gold  Brothers  in  favor  of  P.  D.  Armour  for  $50.00, 
not  being  paid  when  due,  was  protested  for  non-payment.     We  settled  the  matter  with  the  payee 
by  giving  him  a  sight  draft  for  $51  drawn  upon  Robert  Jones.     The  $51  covers  the  draft  on  Gold 
Brothers  and  the  protest  fees. 
.Cash  Sales,  $212.67. 

27. 

Sell  to  Bryant  &  Clarvoe,  on  %,  18  cheese,  60  lbs.  each,  at  12^  per  lb.,  12  boxes  crackers  at 
$1.50  per  box,  3  bbls.  pure  cider  vinegar,  53,  55,  and  52  gals.,  at  6j£  per  gal.,  3  bbls.,  160  gals.,  syrup 
at  32 j£  per  gal. 

Sell  to  Boyer  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  3  bbls.  N.O. 
Molasses,  160  gals.,  at  32^  per  gal.,  6  boxes  Proctor  &  Gamble's  Soap  at  $2.45  per  box. 

Receive  from  L.  W.  Johnson,  on  %,  note  for  $170.25  for  bills  of  8th,  16th  and  22nd  instant, 
dated  Baltimore,  Md.,  Feb.  27th,  19 — ,  due  60  days  after  date. 

Buy  from  Woolson  Spice  Co.,  on  %,  100  bbls.,  34,351  lbs.,  granulated  sugar  at  5^  per  lb. 

Send  check  for  $1,000  to  Woolson  Spice  Co.,  to  apply  on  account. 

Sell  to  J.  T.  Bailey,  on  %,  24  hams,  10^  lbs.  each,  at  12^  per  lb.,  12  cases  Uneeda  biscuit  at 
$2  per  case,  2  bbls.,  110  gals.,  pure  cider  vinegar  at  6j£  per  gal.,  6  cheese,  60  lbs.  each,  at  12^  per  lb. 

Sell  to  William  Jackson,  on  %,  6  bbls.,  2,058  lbs.,  granulated  sugar  at  5|^  per  lb.,  8  doz.  cans 
Eagle  Brand  Corn  at  75^  per  doz.,  100  cocoanuts  at  $3.25  per  100,  6  doz.  cans  salmon  at  $1.15  per 
doz. 

Cash  sales,  $204.36. 


182        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

28. 

Receive  from  J.  N.  Frantz,  bank  draft  for  $151.22  in  full  of  %. 

Pay  Fred.  Baker  on  salary  for  month,  $20. 

Pay  Robert  West  balance  on  salary,  $25. 

Pay  Charles  Saum  balance  due  on  salary  for  month,  $15. 

Sell  to  McGaw  &  Co.,  on  %,  10  doz.  cans  Enterprise  Tomatoes  at  75c"  per  doz.,  3  cheese  60 
lbs.  each,  at  12^  per  lb.,  12  hams,  126  lbs.,  at  12^  per  lb.,  5  cases  Quaker  Oats  at  $2.25  per  case. 

Receive  from  J.  B.  Friday  &  Co.,  on  %,  $188.05  for  bills  of  6th  and  14th  instant. 

Receive  from  Wagner  &  Johnson,  on  %,  check  for  $265.50  for  bill  of  the  12th  instant. 

Sell  to  Gold  Bros.,  on  %,  10  bbls.  apples  at  $2.50  per  bbl.,  1  bbl.  cider  vinegar,  53  gals.,  at  6^ 
per  gal. 

Sell  to  Maynadiei*  &  Co.,  on  %,  12  doz.  cans  corn  at  75^  per  doz.,  8  doz.  cans  Crawford  Peaches 
at  $1.85  per  doz.,  2  bbls.  herring  at  $2  per  bbl.,  3  boxes  lemons  at  $2.50  per  box. 

Pay  drayage  to  date,  $5.35. 

Cash  sales,  $210.30. 

Credit  each  of  the  traveling  salesmen  and  each  of  the  partners  for  their  salaries. 

Credit  partners  for  interest  on  investment. 

The  books  are  now  to  be  closed. 

Inventories  are  as  follows: 

Merchandise $15,908.25 

Store  and  Office  Fixtures 825.00 

198.  Compute  the  interest  to  date  on  all  notes  payable  which  bear  interest.  Use  this  as  a 
liability  inventory  on  Interest  account.  Then  compute  the  interest  to  date  on  all  notes  receiv- 
able, which  bear  interest,  and  use  this  amount  as  a  resource  inventory  on  the  same  account.  Make 
a  list  of  these  notes  from  the  Bill  Book,  showing  the  amount  of  interest  which  has  accrued  on  each, 
and  present  the  list  to  the  teacher. 

WRITTEN  TEST  NO.  15. 

1.  Why  are  accounts  equated? 

2.  Does  either  party  gain  or  lose  by  equating?    Why? 

3.  Why  do  you  subdivide  Mdse.  and  Expense? 

4.  Into  what  account  are  the  subdivisions  under  Mdse.  closed? 

5.  How  should  unexpired  insurance  be  considered,  as  to  resource,  or  liability? 

6.  What  is  accrued  interest?    How  handled  at  the  time  of  closing  the  books? 

7.  When  and  why  is  an  account  opened  for  employes?    When  debited  and  when  credited? 

8.  What  is  the  difference  between  salaries  and  wages? 

9.  What  is  a  Pay  Roll?    Time  Book? 

10.  What  is  a  cash  discount?    When  allowed?    What  are  the  entries? 

11.  Define  a  bank  draft  and  explain  its  use. 

12.  To  whose  order  should  a  bank  draft  be  made?  How  should  it  be  endorsed  when  it  is 
to  be  mailed  to  another  place? 

13.  Explain  the  use  of  the  Bill  Book. 

14.  What  do  you  gain  by  using  a  Sales  Book  and  special  columns  in  the  Cash  Book?    Explain. 

15.  Does  the  nature  of  the  business  regulate  the  number  of  special  columns  in  the  Cash  Book? 
Explain. 

16.  Why  is  no  entry  made  in  the  Journal  when  a  deposit  is  made  in  bank? 

17.  How  is  cash  taken  from  the  bank  to  pay  the  running  expenses  of  the  business? 

18.  To  whose  order  is  the  check  made  payable? 

19.  When  it  is  necessary  to  draw  a  check  upon  the  bank  for  private  use,  to  whose  order  is  it 
made  payable? 

20.  What  special  care  should  be  taken  in  filling  out  a  check  and  what  is  the  consequence  of 
carelessness  in  this  respect  in  case  the  check  is  raised? 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        183 

Set  8. 

WHOLESALE    GROCERY    BUSINESS — CONTINUED. 

MARCH   1,   19—. 

Use  a  Four  Column  Journal  in  the  following  set.  The  account  with  the  Bank,  which  has  been 
kept  in  the  Ledger  in  Set  7,  will  no  longer  be  used,  the  account  with  the  bank  being  kept  on  the 
back  of  the  Check  Book  stubs.  Make  an  entry  in  the  Cash  Book  charging  cash  and  crediting  the 
Bank.  This  entry  when  posted  will  close  out  that  account.  Make  out  all  out-going  papers  as 
usual. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  %,  100  bbls.  Gambrill's  Best  Flour  at  $4  per  bbl.,  75 
bbls.  Superior  Family  Flour  at  $3.75  per  bbl. 

Buy  from  Thos.  G.  Cranwell  &  Co.,  on  %,  100  doz.  cans  Eagle  Brand  Corn  at  57^  per  doz., 
100  doz.  cans  Eagle  Brand  Tomatoes  at  57j£  per  doz.,  75  doz.  cans  Marrowfat  Peas  at  90^  per  doz. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  3  bbls., 
162  gals.,  syrup  at  32j£  per  gal. 

Sell  to  Gold  Bros.,  on  %,  12  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  10  boxes  Pearline 
at  $3.75  per  box.,  12  doz.  boxes  gelatine  at  $1.60  per  doz. 

Receive  from  S.  N.  Bloom  &  Co.,  on  %,  check  for  $79.24. 

Sell  to  Chas.  Carter,  on  %,  12  doz.  bottles  Whittemer's  Shoe  Polish  at  $2  per  doz.,  2  cases 
Rumford  Baking  Powder  at  $2.70  per  case,  2  cases  Banner  Lye  at  $4.25  case,  2  boxes  Soapine  at 
$3.75  per  box. 

Sell  to  C.  P.  Kreamer,  for  cash,  10  lbs.  Oolong  Tea  at  50^  per  lb.,  2  boxes  washing  soda  at 
$3.50  per  box. 

Pay  gas  bill  for  month,  $5.25. 

Cash  sales,  $195.40. 

.   draws  $150  for  private  use. 

(Student's  name) 

2. 

Send  check  to  Woolson  Spice  Co.,  for  bill  of  the  27th  ult.  less  2%  discount. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  50  cases  Banner  Lye  at  $2.40  per  case,  75  doz.  cans 
salmon  at  90^  per  doz. 

Sell  to  J.  N.  Frantz,  on  %,  3  cases  Hawk  Eye  Oats  at  $2.25  per  case,  3  boxes  Ivory  Soap  at 
$6  per  box,  5  bags  E.  B.  C.  Coffee,  100  lbs.  each,  at  15f£  per  lb. 

Sell  to  Baker  &  Co.,  on  %,  10  boxes  Procter  &  Gamble's  Soap  at  $2.45  per  box,  8  bags 
coffee,  100  lbs.  each,  at  15^  per  lb.,  18  cheese,  60  lbs.  each,  at  12|ff  per  lb. 

Sell  L.  W.  Johnson,  on  %,  12  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz.,  10  doz.  cans  cher- 
ries at  $1.25  per  doz.,  30  doz.  cans  mushrooms  at  $2.70  per  doz.,  12  doz.  cans  Bartlett  pears  at 
$1.10  per  doz. 

Pay  salaries  for  week  as  follows:  John  Jones,  $10;  James  Marshall,  $12;  Albert  Handley,  $15. 

Cash  sales,  $193.30. 

4. 

Buy  store  building  and  fixtures,  $9,500,  paying  $3,000  cash,  remainder  by  note  due  two  years 
from  date  with  6%  interest. 

Pay  freight  on  goods,  B.  &.  O.  R.  R.,  $5.45. 

Sell  to  E.  C.  Shull,  on  %,  5  cases  Quaker  Oats  at  $2.25  per  case,  6  bbls.,  2,058  lbs.,  granulated 
sugar  at  5f  i  per  lb. 

Buy  of  Edward  L.  Palmer  &  Co.,  on  %,  100  bbls.,  34,512  lbs.,  granulated  sugar  at  5j<fr  per  lb. 

Receive  from  Jordan  Stabler  Co.,  check  for  $77.39  in  full  of  account. 

Sell  to  Frank  Reist,  on  %,  12  doz.  cans  Eagle  Brand  Corn  at  75^  per  doz.,  100  cocoanuts  at 
$3.25  per  100,  5  boxes  Pearline  at  $3.75  per  box. 


184        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Sell  to  Miller  &  Hartmann  on  %,  25  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  3  sacks  rice, 
240  lbs.  each,  h\i  per  lb.,  8  boxes  Soapine  at  $3.75  per  box,  3  boxes  Procter  &  Gamble's  Soap  at 
$2.45  per  box. 

Cash  sales,  $201.17. 

5. 

Fred.  Baker  draws  $15  for  expenses. 

Pay  for  bill-heads  and  letter-heads,  $5.50. 

Buy  from  C.  A.  Gambrill  Mfg.  Co.,  on  %,  75  bbls.  Superior  Family  Flour  at  $3.75  per  bbl. 

Sell  to  Robt.  Jones  &  Co.,  on  %,  24  bags  Java  Coffee,  100  lbs.  each,  at  30^  per  lb.,  4  cases 
Quaker  Oats  at  $2.25  per  case,  12  doz.  cans  Bartlett  pears  at  $1.70  per  doz. 

Sell  to  Otto  Tielman  &  Son,  on  %,  3  bbls.,  161  gals.,  vinegar  at  6j£  per  gal.,  54  bbls.,  268  gals, 
syrup  at  32j£  per  gal. 

Pay  to  J.  W.  Lyons  for  repairs  to  store  room,  $345.25. 

Sell  to  Cooper  Bros.,  on  %,  25  bbls.,  8,530  lbs.,  granulated  sugar  at  5ff£  per  lb.,  200  cocoanuts 
at  $3.25  per  100,  24  doz.  cans  Enterprise  Corn  at  75^  per  doz.,  12  doz.  cans  Bartlett  pears  at  $1.70 
per  doz. 

Sell  to  C.  Walburn  &  Co.,  on  %  12  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  3  boxes  wash- 
ing soda  at  $3.75,  10  doz.  cans  cherries  (white)  at  $2.50  per  doz. 

Albert  Handley  draws  $6  on  his  salary. 

Send  check  for  $101  to  Thos.  G.  Cranwell  &  Co.,  to  pay  our  note  of  $100  and  interest  on  same. 

Cash  sales,  $205.75. 

6. 

Sell  to  James  Barbour  &  Son,  Washington,  D.  C,  25  bbls.  Superior  Family  Flour  at  $4.00 
per  bbl.,  3  sacks  rice  at  $2.05  per  sack,  5  bbls.,  267  gals.,  syrup,  at  32j£  per  gal. 

Receive  from  Baker  &  Co.,  check  for  bill  of  the  2nd  instant  less  2%  discount. 

Pay  Edward  L.  Palmer  &  Co.,  on  %,  $287.05. 

Sell  to  Reitz  Bros.,  on  %,  6  cheese,  60  lbs.  each,  at  12^  per  lb.,  5  cases  Banner  Lye  at  $4.25 
per  case,  6  doz.  bottles  French  Shoe  Polish  at  85^  per  doz. 

Sell  to  Wagner  &  Johnson,  on  %,  6  bbls.,  320  gals.,  syrup  at  32^  per  gal.,  3  bbls.  mackerel  at 
$18  per  bbl.,  12  doz.  cans  white  cherries  at  $2.50  per  doz.,  12  doz.  cans  Bartlett  Pears  at  $1.70  per 
doz. 

Charles  Saum  draws  $25  on  salary. 

Send  check  to  Williamson  Creamery  Co.,  on  %,  for  $750  for  bill  of  Feb.  19th. 

Sell  to  Hayes  &  Nurff,  on  %,  3  bbls.  herring  at  $2  per  bbl.,  6  doz.  boxes  gelatine  at  $1.60 
per  doz.,  2  doz.  Extract  Vanilla  at  $2  per  doz. 

Receive  from  Hayes  &  Nurff,  on  %,  check  for  $505.62. 

Sell  for  cash  to  J.  B.  Barrett,  12  hams,  126  lbs.,  at  12^  per  lb.,  5  bbls.,  1,720  lbs.,  granulated 
sugar  at  5f  i  per  lb. 

Send  note  to  Edward  L.  Palmer  &  Co.,  for  $1,811.88  due  in  60  days. 

Cash  sales,  $212.15. 

7. 

Send  check  to  Woolson  Spice  Co.,  for  $525  for  our  note  of  Feb.  5th. 

Receive  from  Charles  Diffendall  &  Co.,  on  %,  their  note  for  $382.49,  dated  Frederick,  Md., 
March  6th,  19 — ,  due  6  months  after  date  with  6%  interest. 

Pay  sight  draft  of  Schriver,  Bentley  &  Co.,  for  $1,340.28. 

Sell  to  F.  W.  Wagner  &  Co.,  on  %,  24  hams,  10|  lbs.  each,  at  12^  per  lb.,  15  bbls.  apples  at 
$2.50  per  bbl.,  3  cases  Quaker  Oats  at  $2.25  per  case,  5  bags  coffee,  100  lbs.  each,  at  26£  per  lb. 

Sell  to  J.  T.  Bailey,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  75^  per  doz.,  2  cases  Baking 
Powder  at  •  1.80  per  case,  10  lbs.  Tameric  at  15^  per  lb.,  2  cases  Red  Seal  Lye  at  $4  per  case. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        185 

Sell  to  Bryant  &  Clarvoe,  on  %,  12  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  5  boxes  ginger 
snaps  at  $1.60  per  box,  3  sacks  Carolina  Rice  at  $2.05  per  sack. 
Robert  West  draws  $15  for  expenses. 
Pay  sight  draft  of  National  Biscuit  Co.,  for  $366.25. 
Cash  sales,  $205.09. 

8. 

Pay  P.  D.  Armour  &  Co.,  on  %,  $364.10. 

Sell  to  Boyer  &  Co.,  on  %,  15  bbls.  GambriU's  Best  Flour  at  $4.40  per  bbl.,  12  doz.  cans  Bart- 
lett  Pears  at  $1.70  per  coz.,  10  doz.  cans  mushrooms  at  $2.70  per  doz. 

Sell  to  John  A.  Gable,  Williamsport,  Pa.,  on  %,  24  hams,  10|  lbs.  each,  at  12|j*  per  lb.,  12 
cheese,  50  lbs.  each,  at  12|^  per  lb.,  12  doz.  cans  Enterprise  Tomatoes  at  75  per  doz.,  8  doz.  cans 
white  cherries  at  $2.50  per  doz.,  10  doz.  cans  choice  peas  at  $1.05  per  doz. 

Receive  from  William  Jackson,  check  for  $104.25  in  payment  of  bill  of  Feb.  5th. 

Buy  from  National  Biscuit  Co.,  on  %,  100  boxes  crackers  at  $1.25  per  box,  100  boxes  ginger 
wafers  at  $1.35  per  box. 

Sell  to  Maynadier  &  Co.,  on  %,  2  cases  Red  Seal  Lye  at  $4  per  case,  50  lbs.  Oolong  Tea  at 
60^  per  lb.,  4  boxes  Soapine  at  $3.75  per  box. 

Receive  from  Hayes  &  Nurff  their  check  for  $127.64  in  payment  of  their  note  of  Feb.  6th, 
and  interest  on  same. 

Cash  sales,  $215.45. 

9. 

Sell  to  S.  N.  Bloom  &  Co.,  on  %,  5  bbls.,  265  gals.,  syrup  at  32^  per  gal.,  8  bbls.  brown  sugar 
2,745  lbs.,  at  H  per  lb. 

Sell  to  Charles  Carter,  on  %,  24  hams,  252  lbs.,  at  \2\t  per  lb.,  6  cheese,  60  lbs.  each,  at  12^ 
per  lb.,  20  bbls.  Superior  Family  Flour  at  $4  per  bbl. 

Pay  sight  draft  of  Schriver,  Bentley  &  Co.,  for  $187.50  for  bill  of  the  2nd  instant. 

Sell  McGaw  &  Co.,  on  %,  5  bbls.,  1,718  lbs.,  granulated  sugar  at  5f^  per  lb.,  2  cases  Baking 
Powder  at  $1.70  per  case,  4  doz.  Brown's  Shoe  Polish  at  85^  per  doz. 

Sell  to  Jordan  Stabler  Co.,  on  %,  24  doz.  cans  Eagle  Brand  Corn  at  75^  per  doz.,  24  doz.  cans 
Crawford  Peaches  at  $1.85  per  doz. 

Receive  from  Frank  Reist,  his  note  for  $402.32,  dated  York,  Pa.,  March  8th,  19 — ,  due  60  days 
from  date. 

Chares  Saum  draws  $15  for  expenses. 

Robert  West  draws  on  salary,  $25. 

Pay  John  Jones  his  salary,  $10. 

Pay  James  Marshall,  his  salary,  $12. 

Pay  Albert  Handley  his  salary  (balance),  $9. 

Pay  drayage  to  date,  $3.75. 

Cash  sales,  $210.80. 

11. 

Buy  from  Woolson  Spice  Co.,  on  %,  500  lbs.  tea  at  35j£  per  lb. 

Buy  from  J.  A.  Edmondson  &  Son,  on  %,  100  bbls,  syrup  at  $13.50  per  bbl.,  100  bbls.  molas- 
ses at  $13.40  per  bbl. 

Pay  C.  A.  Gambrill  Mfg.  Co.,  for  bill  of  1st  instant  less  2%  discount. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  3  cases  Banner  Lye  at  $4.25  per  case,  20  bbls.  Best  Family 
Flour  $4.40  per  bbl.,  10  doz.  cans  salmon  at  $1.15  per  doz. 

Sell  to  Gold  Bros.,  on  %,  3  bbls.,  53,  51,  55  gals.,  molasses  at  32^  per  gal.,  5  boxes  figs  at$1.00 
per  box,  12  California  Hams,  120  lbs.,  at  8f^  per  lb. 

Sell  to  L.  W.  Johnson,  on  %,  3  cases  Red  Seal  Lye  at  $4  per  case,  5  cases  Quaker  Oats  at  $2.24 
per  case,  10  doz.  cans  No.  2  peaches  at  90^  per  doz. 


186        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Receive  from  Bryant  &  Clarvoe,  check  for  $243.90  in  payment  of  bills  of  Feb.  5th  and  13th 
Pay  for  automobile  for  A.  E.  Trader,  $250. 
Cash  sales,  $205.35. 

12. 

Receive  from  Otto  Tielman  on  %,  bank  draft  for  $350. 

Fred.  Baker  draws  $15  for  expenses. 

Sell  to  J.  N.  Frantz,  on  %,  5  boxes  Grandpa's  Soap  at  $4  per  box,  5  doz.  cans  peas  at  $1.15 
per  doz.,  5  doz.  cans  Bartlett  pears  at  $1.70  per  doz. 

Pay  freight  on  goods,  P.  R.  R.,  $4.25. 

Pay  for  store  improvements,  $25. 

A.  E.  Trader  draws  for  personal  use,  $100. 

Sell  to  C.  P.  Kreamer  for  cash,  18  doz.  cans  salmon  at  $1.15  per  doz.,  3  bags  coffee,  100  lbs. 
each ,  at  26c"  per  lb.,  2  bbls.  herring  at  $2  per  bbl. 

Sell  to  Miller  &  Hartman,  on  %,  10  bbls.,  3,435  lbs.,  granulated  sugar  at  5f^  per  lb.,  10  boxes 
oranges  at  $3.25  per  box,  5  bags  coffee,  100  lbs.  each,  at  26c1  per  lb. 

Sell  to  Baker  &  Co.,  on  %,  20  bbls.,  6,871  bis.,  granulated  sugar  at  5fj£  per  lb.,  24  hams,  10£ 
lbs.  each,  at  V2\i  per  lb. 

Receive  from  C.  Walburn  &  Co.,  their  note  for  bill  of  Feb.  8th,  $400.13,  dated  Charleston, 
S.  C,  March  11th,  19 — ,  due  90  days  from  date. 

Cash  sales,  $216.47. 

13. 

Sell  to  E.  C.  Shull,  on  %,  5  boxes  Soapine  at  $3.75  per  box,  12  doz.  cans  Enterprise  Tomatoes 
at  75^  per  doz. 

Sell  to  Charles  Diffendall  &  Co.,  on  %,  24  hams,  10|  lbs.  each,  at  12^  per  lb.,  20  bbls.  Best 
Family  Flour  at  $4.40  per  bbl. 

John  Jones  draws  $5  on  his  salary. 

Buy  from  Thomas  G.  Cranwell  &  Co.,  on  %,  50  doz.  bottles  choice  pickles  at  50^  per  doz. 

Receive  from  Bryant  &  Clarvoe,  check  for  $271.75  for  bills  of  Feb.  19th  and  27th. 

Sell  to  Cooper  Bros.,  on  %,  5  boxes  Pearline  at  $3.75  per  box,  10  cases  Uneeda  Biscuit  at  $2 
per  case,  12  boxes  crackers  at  $1.50  per  box. 

Sell  to  Wagner  &  Johnson,  on  %,  3  cases  Quaker  Oats  at  $2.25  per  case,  5  cases  Uneeda  Bis- 
cuit at  $2  per  case,  4  boxes  Tar  Soap  at  $4  per  box,  3  cases  Rumford  Baking  Powder,  at  $2.70  per 
case. 

Buy  from  P.  D.  Armour,  on  %,  100  hams,  1,150  lbs.,  at  6|^  per  lb. 

Cash  sales,  $205.18. 

14. 

Charles  Saum  draws  $15  for  expenses. 

Pay  draft  of  J.  A.  Edmondson  &  Son  for  $2,645.60. 

Sell  to  Hayes  &  Nurff,  on  %,  25  bbls.  Best  Family  Flour  at  $4.40  per  bbl.,  10  doz.  cans  Bart- 
lett Pears  at  $1.70  per  doz. 

Sell  to  Robert  Jones  &  Co.,  on  %,  5  bbls.,  1,725  lbs.,  granulated  sugar  at  5fj£  per  lb.,  12  hams, 
136  lbs.,  at  12|j£  per  lb.,  12  doz.  cans  Enterprise  Tomatoes  at  75j£  per  doz.,  25  lbs.  raisins  at  10^ 
per  lb. 

Sell  to  Reitz  Bros.,  on  %,  5  boxes  crackers  at  $1.50  per  box,  5  doz.  bottles  catsup  at  $2  per 
doz.,  10  lbs.  ginger  at  18^  per  lb.,  15  lbs.  black  pepper  at  12^  per  lb. 

Buy  from  John  Schoenewolf  &  Co.,  on  %,  50  bbls.  cider  vinegar  at  $2.67  per  bbl. 

Sell  to  Otto  Tielman  &  Son,  on  %,  15  bbls  granulated  sugar,  5,145  lbs.,  at  5|^  per  lb.,  5  doz. 
bottles  mustard  at  $1.50  per  doz.,  2  boxes  lemons  at  $2.50  per  box. 

Cash  sales,  $209.85. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        187 

15. 

Receive  from  Miller  &  Hartman,  on  %,  note  for  $360.01,  due  in  30  days  with  interest  at  6% 
for  bill  of  the  12th  instant. 

Receive  from  Gold  Bros,  on  %,  check  for  $375. 

Sell  to  J.  T.  Bailey,  on  %,  12  bbls.  Best  Family  Flour  at  $4.40  per  bbl.,  12  doz.  cans  Eagle 
Brand  Corn  at  750  per  doz.,  10  lbs.  whole  pepper  at  6|0  per  lb. 

Sell  to  William  Jackson,  on  %,  3  boxes  Ivory  Soap  at  $6  per  box,  3  boxes  Pearline  at  $3.75  per 
box,  10  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  12  doz.  cans  Marrowfat  Peas  at  $1.15  per  doz. 

Sell  F.  W.  Wagner  &  Co.,  on  %,  5  boxes  Pearline  at  $3.75  per  box,  5  cases  Baking  Powder  at 
$1.80  per  case. 

Sell  to  Maynadier  &  Co.,  on  %,  12  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  3  cases  Bak- 
ing Powder  at  $1.80  per  case,  12  doz.  cans  Crawford  Peaches  at  $1.85  per  doz.,  3  boxes  oranges  at 
$3.50  per  box. 

Albert  Handley  draws  $8  on  his  salary. 

Cash  sales,  $210.05. 

16. 

Pay  freight  on  goods,  B.  &  O.  R.  R.,  $5.25. 

Sell  to  McGaw  &  Co.,  on  %,  25  bbls.  Gambrill's  Best  Flour  at  $4.40  per  bbl.,  25  lbs.  Raisins 
at  100  per  lb.,  24  hams,  276  lbs.,  at  12|0  per  lb.,  5  bbls.,  1,725  lbs.,  sugar  at  5|0  per  lb.,  3  sacks 
Carolina  Rice  at  $2.05  per  sack. 

Sell  to  Boyer  &  Co.,  on  %,  5  cases  Red  Seal  Lye  at  $4  per  case,  6  boxes  Gold  Dust  at  $4.25 
per  box,  50  lbs.  Imperial  Tea  at  500  per  lb.,  3  cases  Baking  Powder  at  $1.80  per  case. 

Receive  from  L.  W.  Johnson,  on  %,  check  for  $124. 

Sell  to  Charles  Carter,  on  %,  12  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  12  doz.  cans  Enter- 
prise Tomatoes  at  750  per  doz.,  8  doz.  cans  Salmon  at  $1.15  per  doz. 

Pay  John  Jones  balance  on  salary,  $5. 

Pay  salaries,  James  Marshall,  $12  Albert  Handley,  balance  on  salary  $7. 

Pay  for  hauling,  $8.35. 

Cash  sales,  $215. 

18. 

Sell  James  Barbour  &  Son,  on  %,  3  bbls.,  1,030  lbs.,  granulated  sugar  at  5f0per  lb.,  12  doz. 
cans  Enterprise  Tomatoes  at  750  per  doz.,  3  boxes  lemons  at  $2.50  per  box. 

Sell  Jordan  Stabler  Co.,  on  %,  20  bbls.  Best  Family  Flour  at  $4.40  per  bbl.,  5  casesBaking 
powder  at  $1.80  per  case,  5  cases  Red  Seal  Lye  at  $4  per  case,,  4  cases  Gold  Dust  Soap  Powder 
at  $4.25  per  case. 

Buy  from  Williamson  Creamery  Co.,  on  %,  50  cheese,  60  lbs.  each,  at  8f0  per  lb. 

Send  John  Schoenewolf  &  Co.,  on  %,  note  at  60  days  for  $597.01. 

Receive  from  John  A.  Gable,  a  note  for  $139.60  for  bill  of  the  8th  instant,  dated  Williamsport, 
Md.,  May  17th,  due  60  days  after  date. 

Fred.  Baker  draws  $30  on  his  salary. 

Sell  to  C.  Walburn  &  Co.,  on  %,  5  bbls.,  1,030  lbs.,  granulated  sugar  at  5f0  per  lb.,  12  doz. 
bottles  catsup  at  $2  per  doz.,  2  boxes  oranges  at  $3.50  per  box. 

Cash  sales,  $212.50. 

Pay  our  note  in  favor  of  the  Gambrill  Mfg.  Co.  due  to-day. 

19. 

Robert  West  draws  $15  for  expenses. 

Receive  from  Boyer  &  Co.,  on  %,  check  for  $257.36  for  bill  of  Feb.  9th. 


188        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  to  Bryant  &  Clarvoe,  on  %,  10  bbls.  granulated  sugar,  3,445  lbs.,  at  5§0  per  lb.,  5  cases 
Red  Seal  Lye  at  $4  per  case,  50  lbs.  raisins  at  100  per  lb.,  5  boxes  Proctor  &  Gamble's  Soap  at  $2.45 
per  box,  3  cases  Pearline  at  $3.75  per  case. 

Receive  from  J.  B.  Friday,  on  %,  bank  draft  for  $192.84  for  bills  of  Feb.  21st.  and  Mar.  1st. 

Sell  to  S.  N.  Bloom  &  Co.,  on  %,  8  boxes  Ivory  Soap  at  $6  per  box,  6  cases  Pearline  at  $3.75 
per  case,  3  bbls.,  345,  342,  343  lbs.,  granulated  sugar  at  5f0  per  lb.,  18  boxes  crackers  at  $1.50  per 
box. 

Sell  to  Frank  Reist,  on  %,  18  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  12  cheese,  60  lbs. 
each,  at  12^0  per  lb.,  15  bbls.  Baldwin  Apples  at  $2.50  per  bbl.,  10  cases  Red  Seal  Lye  at  $3.75  per 
case. 

Sell  to  L.  W.  Johnson,  on  %,  15  bbls.  GambrilFs  Best  Flour  at  $4.40  per  bbl.,  12  doz.  cans 
Eagle  Brand  Corn  at  750  per  doz.,  3  sacks  Carolina  Rice  at  $2.05  per  sack. 

Receive  from  Wagner  &  Johnson,  on  %,  bank  draft  for  $214.70  for  bills  of  Feb.  2nd  and  19th. 

Cash  sales,  $218.78. 

20. 

Buy  from  Edward  L.  Palmer  &  Co.,  on  %,  25  boxes  lemons  at  $2.25  per  box,  100  lbs.  raisins 
at  70  per  lb.,  50  doz.  bottles  catsup  at  $1.60  per  doz. 

Buy  from  Woolson  Spice  Co.,  on  %,  50  bags  coffee,  100  lbs.  each,  at  180  per  lb.,  50  bbls., 
17,185  lbs.,  granulated  sugar  at  5^0  per  lb. 

Sell  to  Baker  &  Co.,  on  %,  8  cases  Red  Seal  Lye  at  $3  75  per  case,  6  bbls.,  318  gals.,  syrup  at 
320  per  gal.,  10  cases  Baking  Powder  at  $1.80  per  case. 

Sell  to  Gray  &  Straight,  for  cash,  12  doz.  cans  Enterprise  Tomatoes  at  750  per  doz.,  3  bbls., 
160  gals.,  syrup  at  320  per  gal.,  1  case  Red  Seal  Lye  at  $4  per  case,  1  case  Pearline,  $3.75. 

Receive  from  James  Barbour  &  Son,  on  %,  check  for  $185.34. 

Sell  to  Cooper  Bros.,  on  %,  10  boxes  ginger  snaps  at  $1.60  per  box,  12  cases  Quaker  Oats  at 
$2.25  per  case. 

Sell  to  E.  C.  Shull,  on  %,  5  bbls.  Syrup,  265  gals.,  at  320  per  gal. 

Pay  drayage  on  goods,  $3.45. 

Cash  sales,  $216.40. 

21. 

Send  note  at  45  days  with  interest  to  Thomas  G.  Cranwell  &  Co.,  for  $1,232.50  for  bill  of 
Feb.  18th. 

Sell  to  John  A.  Gable,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  750  per  doz.,  12  doz.  cans 
peas  at  $1.15  per  doz.,  6  boxes  crackers  at  $1.50  per  box,  50  lbs.  California  Evaporated  Peaches 
at  120  per  lb.,  3  cases  Quaker  Oats  at  $2.25  per  case. 

Sell  to  Robert  Jones  &  Co.,  on  %,  8  cases  Uneeda  Biscuit  at  $2.25  per  case,  100  lbs.  California 
Evaporated  Peaches  at  120  per  lb.,  5  boxes  lemons  at  $2.50  per  box,  100  cocoanuts  at  $3.25  per  100. 

Receive  from  Robert  Jones  &  Co.,  check  for  $215.35  for  three  unpaid  bills  in  February. 

Receive  from  Boyer  &  Co.,  their  check  for  their  note  of  Feb.  19th,  and  interest  on  same. 

22. 

Sell  to  Reitz  Bros.,  on  %,  15  bbls.  GambrilFs  Best  Flour  at  $4.40  per  bbl.,  8  bbls.,  2,745  lbs.* 
granulated  sugar  at  5|0  per  lb. 

Receive  from  McGaw  &  Co.,  on  %,  check  for  $235. 

Sell  to  J.  N.  Frantz,  on  %,  6  cheese,  60  lbs.  each,  at  12|0  per  lb.,  10  sacks  salt  at  $1.50  per 
sack,  12  bbls.  apples  at  $2.50  per  bbl. 

Sell  to  J.  T.  Bailey,  on  %,  1  bag  peanuts,  99  lbs.,  at  3^0  per  lb.,  1  bag  coffee,  110  lbs.,  at  230 
per  lb.,  2  boxes  lemons  at  $2.50  per  box,  55  gals.  Porto  Rico  Molasses  at  350  per  gal.,  53  gals,  kero- 
sene at  80  per  gal.,  56  lbs.  lima  beans  at  70  per  lb. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        189 

Receive  from  Charles  Carter,  on  %,  bank  draft  for  $247.69  for  bill  of  Feb.  19th. 

Sell  to  Hayes  &  Nurff,  on  %,  6  boxes  Ivory  Soap  at  $6  per  box,  25  lbs.  whole  pepper  at  6^j4 
per  lb.,  10  cans  lard,  50  lbs.  each,  at  9j£  per  lb.,  25  green  shoulders,  125  lbs.,  at  8|^  per  lb. 

Sell  to  Gold  Bros.,  on  %,  5  bbls.,  1,725  lbs.,  granulated  sugar  at  5|^  per  lb.,  5  bbls.  apples  at 
$2.50  per  bbl. 

Cash  sales,  $210.25. 

23. 

Send  Check  to  Woolson  Spice  Co.,  for  bill  of  the  20th  less  2%  discount. 

Receive  from  E.  C.  Shull,  on  %,  his  note  for  $157.34,  dated  Columbia,  S.C.,  March  31st,  19—, 
due  60  days  after  date. 

Sell  Maynadier  &  Co.,  on  %,  5  bbls.  syrup,  265  gals.,  at  32c1  per  gal.,  100  lbs.  loaf  sugar  at 
6^  per  lb.,  25  hams,  283  lbs.,  at  12^  per  lb. 

Sell  to  Otto  Tielman  &r  Son,  on  %,  24  doz.  cans  Enterprise  Corn  at  75^  per  doz.,  10  cases 
Uneeda  Biscuit  at  $2  per  case,  8  boxes  Ivory  Soap  at  $6  per  box,  2  bags  Santos  Coffee,  110  lbs.  each, 
at  25j6  per  lb. 

Buy  from  Schriver,  Bentley  &  Co.,  on  %,  50  boxes  Ivory  Soap  at  $4.75  per  box,  40  boxes 
Pearline  at  $3  per  box. 

Pay  salaries  as  follows:  John  Jones,  $10,  James  Marshall,  $12,  Albert  Handley,  $15. 


Cash  sales,  $213.45. 


25. 


Charles  Saum  draws  $15  for  expenses. 

Pay  Robert  West  $30  on  his  salary. 

Pay  Baltimore  Drayage  Co.,  $5.65. 

Sell  to  Miller  &  Hartman,  on  %,  50  sacks  fine  salt  at  $1.50  per  sack,  30  cans  lard,  50  lbs. 
each,  at  8^  per  lb. 

Sell  to  Boyer  &  Co.,  on  %,  24  doz.  cans  Enterprise  Tomatoes  at  lb£  per  doz.,  2  cases  Baking 
Powder  at  $1.80  per  case,  100  lbs.  evaporated  peaches  at  12c1  per  lb. 

Receive  from  Jordan  Stabler  Co.,  on  %,  check  for  bill  of  the  18th  instant,  less  2%  discount. 

Receive  from  Miller  &  Hartman,  their  check  to  pay  note  of  Jan.  23,  and  interest  on  same 
(60  ds.). 

Buy  from  J.  A.  Edmondson  &  Son,  on  %,  50  bbls.  syrup  at  $10.96  per  bbl. 

Receive  from  Baker  &  Co.,  on  %  $188.20. 

Sell  to  John  A.  Gable,  on  %,  12  doz.  jars  olives  at  $1.85  per  doz.,  6  boxes  ginger  snaps  at  $1.60 
per  box,  5  boxes  Ivory  Soap  at  $6  per  box. 

Cash  sales,  $215.45. 

26. 

Sell  to  F.  W.  Wagner  &  Co.,  on  %,  12  bbls.  granulated  sugar,  4,126  lbs.,  at  b\i  per  lb.,  150  lbs. 
California  Evaporated  Peaches  at  12^  per  lb.,  10  lbs.  chocolate  candy  at  15^  per  lb. 

Receive  from  J.  N.  Frantz,  check  for  account,  in  full,  less  2%  discount  on  bill  of  22nd. 
draws  $125  for  private  use. 

(Student's  name) 

Receive  from  Cooper  Bros.,  on  %,  check  for  $750. 

Sell  to  William  Jackson,  on  %,  100  cocoanuts  at  $3.25  per  100,  5  sacks  fine  salt  at  $1.50  per 
sack,  35  lbs.  loaf  sugar  at  6c1  per  lb.,  3  boxes  toilet  soap  at  $8  per  box,  25  lbs.  chocolate  candy  at 
15^  per  lb.,  8  doz.  bottles  household  ammonia  at  $1.40  per  doz. 

Sell  to  J.  B.  Friday  &  Co.,  on  %,  5  cases  Uneeda  Biscuit  at  $2  per  case,  3  boxes  crackers  at 
$1.50  per  box,  2  boxes  ginger  snaps  at  $1.60  per  box. 

Cash  sales,  $208.05. 


190        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

27. 

Receive  from  Otto  Tielman  &  Son,  their  note  for  $452.01  in  full  for  all  bills  purchased  during 
Feb.,  dated  Columbia,  S.  C,  March  27th,  19 — ,  due  90  days  after  date  with  interest  at  6%. 

Pay  draft  of  Williamson  Creamery  Co.,  for  $247.50. 

Sell  to  L.  W.  Johnson,  on  %,  4  cases  Uneeda  Biscuit  at  $2  per  case,  5  boxes  toilet  soap  at  $8 
per  box,  100  lbs.  currant  jelly  at  3^  per  lb.,  100  lbs.  honey  at  12|^  per  lb. 

Sell  McGaw  &  Co.,  on  %,  50  lbs.  soda  at  4j£  per  lb.,  12  bbls.  apples  at  $2.50  per  bbl.,  10  lbs. 
cayenne  pepper  at  6^  per  lb.,  25  lbs.,  French  candy  at  12^  per  lb. 

Receive  from  Baker  &  Co.,  check  for  $426.58  on  %. 

Pay  Edward  L.  Palmer,  on  %,  $143.25. 

Sell  S.  N.  Bloom,  on  %,  5  cases  Uneeda  Biscuit  at  $2  per  case,  3  cases  Baking  Powder  at  $1.80 
per  case. 

Cash  sales,  $182.28. 

28. 

Receive  from  Reitz  Bros.,  on  %,  check  for  $175. 

Receive  from  Maynadier  &  Co.,  on  %,  $325. 

Pay  freight  on  goods,  B.  &  O.  R.  R.,  $3.25. 

Sell  to  C.  P.  Kreamer,  for  cash,  10  bbls.  granulated  sugar,  3,865  lbs.,  at  5f^f  per  lb. 

Sell  to  Jordan  Stabler  Co.,  on  %,  15  bbls.  Superior  Family  Flour  at  $4  per  bbl.,  5  bbls.,  1,725 
lbs.,  granulated  sugar  at  5f^  per  lb. 

Sell  to  C.  Walburn,  on  %,  8  cheese,  60  lbs.  each,  at  12|jf  per  lb.,  3  boxes  crackers  at  $1.50  per 
box,  4  boxes  Cookies  at  $1.80  per  box. 


Cash  sales,  $223.22. 


29. 


Fred.  Baker  draws  $15  for  expenses. 
Charles  Saum  draws  $20  on  salary. 
Pay  freight  on  goods,  P.  R.  R.,  $4.60. 
Pay  drayage  on  goods,  $2.50. 

Receive  from  Miller  &  Hartman,  on  %,  check  for  bill  of  the  3rd,  $175.15. 
Sell  to  James  Barbour  &  Son,  on  %,  3  cases  Baking  Powder  at  $1.80  per  case,  2  cases  Banner 
Lye  at  $4.25  per  case,  30  lbs.  chocolates  at  15^  per  lb. 
Cash  sales,  $175.30. 

30. 


Sell  Wagner  &  Johnson,  on  %,  24  hams,  276  lbs.,  at  12^  per  lb.,  2  boxes  lemons  at  $2.50  per 
box. 

Sell  to  Gold  Bros.,  on  %,  2  bags  Santos  Coffee,  110  lbs.  each,  at  23^  per  lb.,  50  lbs.  Strong 
Rio  at  21^  per  lb.,  60  lbs.  Java  at  31e"  per  lb. 

Sell  to  Reitz  Bros.,  on  %,  2  bbls.,  110  gals.,  syrup  at  12j£  per  gal. 

Pay  Fred.  Baker,  $45  on  salary. 

Pay  John  Jones  week's  salary,  $10. 

Pay  Robert  West  on  salary  $15. 

Pay  James  Marshall  salary  for  week,  $12. 

Pay  Charles  Saum  on  salary,  $20. 

Pay  Albert  Handley,  week's  salary,   $15. 

Pay  Robert  West  for  expenses,  $15. 

Cash  sales,  $189.73 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        191 

Draw  drafts  at  thirty  days  after  date  upon  the  following: 

Bryant  &  Clarvoe,  $300.00;  Jordan  Stabler  Company,  $200.00;  McGaw  &  Company,  $200.00; 
Gold  Brothers,  $200.00;  Boyer  &  Company,  $400.00;  William  Jackson,  $360.00;  L.  W..  Johnson, 
$100.00;  Cooper  Brothers,  $400.00;  Miller  &  Hartman,  $400.00;  C.  Walburn,  $200.00;  and  send 
same  to  J.  A.  Edmondson  &  Company  to  apply  on  account. 

Credit  each  of  the  traveling  salesmen  and  each  of  the  partners  for  their  salary. 

Credit  partners  for  interest  on  investment. 

The  books  are  now  to  be  closed. 

Inventories  as  follows : 

Real  Estate $9,500.00 

There  has  been  a  gain  of  22%  on  Merchandise  sold;  you  may  find  the  inventory. 

Store  and  Office  Fixtures  have  depreciated  2%. 

Compute  interest  to  date  on  all  notes  receivable  and  notes  payable  which  bear  interest  and 
present  list  of  same  to  teacher 

Construct  the  usual  closing  statements. 

WRITTEN  TEST  NO.  16. 

1.  Why  is  information,  other  than  amounts,  dates  and  the  pages  of  the  original  books,  re- 
corded in  Ledger  accounts? 

2.  Why  should  more  than  the  letters  J.  or  C,  standing  respectively  for  Journal  and  Cash 
Book  be  entered  at  the  time  of  posting? 

3.  Should  the  terms  of  the  sale  be  entered  in  the  account? 

4.  Should  all  accounts  be  indexed?    Why? 

5.  What  is  a  vowel  index? 

6.  When  are  accounts  averaged?    Why  are  they  averaged? 

7.  What  is  a  general  partnership?    A  limited  partnership? 

8.  How  many  kinds  of  partners  are  there? 

9     What   is   a   partnership   agreement?    Articles   of   co-parnership?     Lease?    Franchise? 
Injunction?    Easement? 

10.  What  does  the  partnership  agreement  contain?    How  many  copies  should  be  made? 
Why  should  much  thought  be  exercised  in  making  it? 

11.  For  what  purpose  is  a  partnership  formed?    How  many  partners  required? 

12.  Is  it  necessary  that  they  invest  equal  amounts? 

13.  How  are  profits  apportioned  when  partners  invest  different  amounts? 

14.  How  may  partners  be  equal  if  one  invests  cash  and  the  other  nothing  but  his  name? 
Could  one  invest  his  skill  in  an  undertaking? 

15.  When  one  partner  invests  assets  which  afterward  prove  worthless,  what  entries  should 
be  made  when  the  loss  is  discovered? 

16.  What  is  collateral?    What  are  Securities?    Stocks?    Bonds? 

17.  Does  the  act  of  a  partner  bind  the  firm? 

18.  What  are  the  duties  of  an  entry  clerk?    Shipping  clerk?     Receiving  clerk? 

19.  Give  ten  rules  or  tests  to  follow  in  locating  an  error  in  a  Trial  Balance. 

20.  What  is  meant  by  a  transposition  of  figures?  How  may  such  an  error  be  found?  What 
is  meant  by  a  transplacement?    How  may  such  an  error  be  found? 


Single  Entry. 


199.  Nearly  all  progressive  business  houses  now  use  the  system  of  bookkeeping  known  as 
Double  Entry,  but  there  are  a  considerable  number  of  small  business  firms  which  still  adhere  to 
the  older  and  simpler  style  of  bookkeeping  known  as  Single  Entry.  We  teach  Double  Entry  first, 
because  it  is  in  so  much  more  general  use  and  because  when  you  have  learned  Double  Entry,  with 
just  a  little  explanation,  you  also  understand  Single  Entry,  without  pursuing  a  regular  course  in 
it.  However,  your  training  in  bookkeeping  will  not  be  complete  without  this  lesson  in  Single 
Entry  Bookkeeping,  because  you  may  at  some  time  be  called  upon  to  keep  books  for  an  employer 
who  wishes  his  books  kept  by  the  Single  Entry  method,  and  you  may  at  some  time  be  called  upon 
to  open  a  set  of  Double  Entry  books  for  a  firm  whose  books  have  been  kept  by  the  Single  Entry  method. 

200.  Double  Entry  Bookkeeping  is  so  called  because  there  are  two  entries  for  each  and  every 
amount,  a  debit  and  a  credit,  while  in  Single  Entry,  as  a  rule,  there  is  only  one  entry,  a  single  entry, 
for  each  amount. 

201.  The  oldest  and  simplest  form  of  bookkeeping  consisted  of  only  one  book,  the  Ledger, 
in  which  only  personal  accounts  were  kept  just  as  the  keeping  of  personal  accounts  is  taught  in 
articles  29  to  32  of  this  book.  By  that  method,  an  entry  was  made  only  when  a  personal  account 
was  affected  and  then  only  one  entry.  By  that  method,  if  we  buy  from  any  one  on  account,  we  credit 
his  account,  and  are  through  with  the  bookkeeping  for  the  transaction.  If  we  sell  to  anyone  on 
account,  we  debit  his  account.  If  we  receive  a  payment  on  account  from  anyone,  we  credit  his 
account.  If  we  send  a  payment  to  anyone  on  account,  we  debit  his  account.  That  is  all  of  the 
bookkeeping  there  is  for  each  of  those  transactions.  That  is  Single  Entry,  pure  and  simple  in  its 
original  form — Single  Entry,: — only  one  entry  for  each  transaction.  In  that  method,  there  is  no 
posting.  Each  transaction  is  recorded  in  the  Ledger  just  as  it  occurs  and  the  Ledger  is  a  book  of 
original  entries. 

202.  As  time  went  on,  some  persons  wanted  to  know  just  how  much  money  they  had  re- 
ceived, how  much  money  they  had  paid  out,  and  how  much  money  they  ought  to  have  on  hand, 
and  to  have  a  record  of  their  receipts  and  expenditures  from  year  to  year,  and  for  that  reason  a 
Cash  Book  was  added  to  the  system. 

203.  The  Cash  Book  in  Single  Entry  Bookkeeping  is  kept  somewhat  like  the  Cash  Account 
in  the  first  lesson  in  this  book,  and  when  a  Cash  Book  is  kept,  all  of  the  transactions  which  affect 
personal  accounts  and  in  which  cash  is  received  or  paid  out,  have  two  entries  just  the  same  as  in 
regular  Double  Entry  Bookkeeping;  the  one  to  the  personal  account,  and  the  other  in  the  Cash 
Book,  and  then  the  best  plan  is  to  make  the  entry  in  the  Cash  Book  at  the  time  the  transaction 
occurs  and  to  post  from  it  to  the  Ledger  just  as  in  Double  Entry  Bookkeeping.  Of  course,  there 
will  be  many  entries  in  the  Cash  Book  which  cannot  be  posted  because  they  do  not  affect  any  of 
the  Ledger  accounts. 

204.  When  a  Cash  Book  is  kept  with  Single  Entry  books,  it  is  a  good  plan  to  enter  the  cash 
that  is  received  that  is  to  be  posted,  to  the  credit  side  of  some  account  in  the  Ledger  in  the  first 
money  column  on  the  debit  side  of  the  Cash  Book  and  to  enter  all  cash  that  is  received  that  is  not 
to  be  posted,  in  the  second  money  column  in  the  Cash  Book;  and  to  enter  all  cash  that  is  paid  out  that 
is  to  be  posted  to  the  debit  side  of  some  account  in  the  Ledger,  in  the  first  money  column  on  the  credit 
side  of  the  Cash  Book  and  to  enter  all  cash  that  is  paid  out  that  is  not  to  be  posted,  in  the  s-econd 
money  column  on  the  credit  side  of  the  Cash  Book.  Separating  the  money  received  and  paid  out 
in  this  way  into  two  classes, — that  which  is  to  be  posted  and  that  which  is  not  to  be  posted,  serves 
a  double  purpose.  First,  it  enables  the  bookkeeper  to  see  at  a  glance  in  posting,  which  items  are 
to  be  posted  and  which  items  are  not  to  be  posted,  and  second,  it  forms  the  basis  for  a  method  of 

192 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        193 

"proof  of  posting"  in  Single  Entry  which  to  some  extent  takes  the  place  of  the  Trial  Balance  in 
Double  Entry,  for  if  all  of  the  cash  debits  which  are  to  be  posted  are  added  to  all  of  the  Journal  or 
Day  Book  credits,  if  the  posting  has  been  done  correctly,  the  amount  found  will  be  equal  to  the 
sum  of  all  the  credits  in  the  Ledger,  and  if  all  of  the  Cash  Book  credits  which  are  to  be  posted  are 
added  to  all  of  the  Journal  or  Day  Book  debits,  the  amount  found  will  be  equal  to  all  of  the  debits  in 
the  Ledger,  or  the  difference  between  the  total  of  the  Cash  Book  debits  and  Journal  credits  mentioned 
and  the  total  of  the  Cash  Book  credits  and  Journal  debits  mentioned,  will  be  equal  to  the  difference 
between  the  total  of  the  Ledger  debits  and  the  total  of  the  Ledger  credits.  Proving  the  posting 
in  this  way  is  sometimes  spoken  of  as  taking  a  Trial  Balance  in  Single  Entry. 

205.  Later  on  persons  wanted  to  know  how  much  money  they  paid  for  merchandise  and  how 
much  they  received  for  it,  and  so  began  keeping  a  Merchandise  account;  and  some  wanted  to  know 
the  total  amount  of  their  yearly  expenses,  and  so  kept  an  Expense  account;  or  the  amount  they  paid 
out  for  salaries  or  advertising,  and  go  kept  a  Salaries  or  an  Advertising  account,  and  those  accounts 
are  kept  just  as  you  were  taught  to  keep  them  in  articles  33  to  38  in  .this  book. 

206.  Some  wanted  to  have  accounts  showing  what  notes  they  had  given  payable  to  other 
persons  and  what  notes  of  other  persons  payable  to  themselves  they  had  on  hand,  and  so  started 
Bills  Payable  and  Bills  Receivable  accounts,  which  are  kept  just  as  you  have  been  taught  to  keep 
those  accounts  in  articles  80  to  97  of  this  book. 

207.  When  the  person  wished  to  keep  so  many  accounts,  it  became  necessary  to  have  some 
place  to  keep  a  general  record  of  transactions  in  order  that  the  debiting  and  crediting  of  the  proper 
accounts  should  not  be  overlooked,  and  for  that  purpose  the  Day  Book  or  Journal  was  introduced, 
which  may  be  kept  just  like  the  Journal  in  Double  Entry  bookkeeping,  except  that  there  may  be 
some  cases  in  which  there  will  not  be  both  a  debit  and  credit,  and  in  such  cases  it  is  correct  to  make 
an  entry  for  a  debit  only  or  a  credit  only,  whichever  may  be  desired,  without  any  balancing  entry. 
As  an  illustration  of  a  case,  in  which  there  would  not  be  both  a  debit  and  a  credit  in  the  Journal, 
we  will  suppose  you  are  keeping  books  by  Single  Entry  for  a  firm  which  does  not  keep  any  Store 
and  Office  Fixtures  account,  or  any  other  account  to  which  they  wish  things  purchased  for  the 
office  charged.  If  that  firm  purchases  an  Underwood  typewriter  on  account,  from  the  Under- 
wood Typewriter  Company  for  $100,  the  only  entry  in  the  Journal  will  be — Underwood  Type- 
writer Company,  with  the  amount  in  the  credit  column,  followed  on  the  next  line  with  the  explana- 
tion, "bought  Underwood  Typewriter  No. ." 

208.  When  a  Journal  is  kept  in  Single  Entry  Bookkeeping,  you  post  from  it  to  the  Ledger 
just  as  you  do  in  Double  Entry  Bookkeeping,  and  when  a  Cash  Book  and  Journal  are  both  kept, 
all  cash  transactions  are  first  recorded  in  the  Cash  Book,  and  all  transactions  in  which  cash  is  not 
paid  or  received  are  recorded  first  in  the  Journal;  then  the  entries  to  the  Ledger  are  all  made  from 
either  the  Cash  Book  or  the  Journal,  are  all  simply  posting  entries,  and  the  Ledger  has  ceased  to 
be  a  book  of  original  entries. 

209.  The  Cash  Book  and  Journal  in  general  use  by  persons  keeping  Single  Entry  books 
have  just  the  same  ruling  as  the  Cash  Book  and  Journal  used  in  Double  Entry  Bookkeeping,  but 
nearly  all  stationers  sell  a  Ledger  imprinted  "Single  Entry  Ledger"  that  is  different  from  the  one 
used  for  Double  Entry  Bookkeeping.  It  is  ruled  just  like  your  Journal,  except  that  a  line  is  ruled 
a  little  to  the  left  of  the  first  money  column  to  make  a  column  in  which  to  place  the  figures  or  letters 
to  show  where  each  entry  is  posted  from,  and  all  debits  to  each  account  are  entered  in  the  first 
money  column,  and  all  credits  in  the  second  money  column.  There  is  no  good  reason,  however, 
for  using  that  old  form  of  Ledger,  as  the  form  used  for  Double  Entry  Bookkeeping  is  just  as  well 
suited  to  single  Entry  as  to  Double  Entry,  and  is  just  as  superior  to  the  old  form  for  use  in  one 
system  as  in  the  other.  It  places  the  debits  and  credits  farther  apart,  so  that  there  is  less  likeli- 
hood of  entering  the  amount  one  is  recording  in  the  wrong  column. 

210.  You  will  probably  never  want  to  open  a  set  of  Single  Entry  books,  since  if  you  are  open- 
ing the  books  for  a  firm,  you  will  recommend  the  better  'and  more  modern  Double  Entry  System, 


194        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

but  if  you  should  ever  be  called  upon  to  open  a  set  of  books  by  Single  Entry,  to  do  so,  it  is  only 
necessary  to  open  a  Stock  account  for  the  proprietor  of  the  business,  and  credit  it  with  his  net 
investment, — the  difference  between  the  resources  and  liabilities  which  he  invests;  to  open  accounts 
with  all  of  the  persons  owing  the  proprietor,  and  debit  their  accounts  for  the  amounts  they  owe; 
to  open  accounts  with  all  of  the  persons  whom  the  proprietor  owes  and  credit  each  with  the  amount 
due  him,  and  to  debit  the  Cash  account  for  the  amount  of  cash  on  hand;  and  then,  if  any  other 
accounts  are  to  be  kept,  such  as  Bills  Receivable,  Bills  Payable,  Merchandise,  Expense,  etc.,  to 
open  them  with  the  proper  debits  or  credits,  and  then  you  are  ready  to  proceed  with  the  business 
and  to  make  the  entries  as  transactions  occur. 

211.  If  a  Journal  is  to  be  kept,  the  opening  entry  in  it,  consisting  of  a  single  statement  of  the 
debits  and  credits  as  they  are  to  appear  on  the  books,  can  be  copied  from  the  statement  of  resources 
and  liabilities  furnished  or  compiled  as  the  foundation  for  the  books,  and  in  this  case  they  may  be 
transferred  from  the  statement  to  the  Journal  and  posted  from  the  Journal  instead  of  being  trans- 
ferred directly  from  the  statement  to  the  Ledger  and  Cash  Book  as  they  would  be  if  no  Journal  is  kept. 

212.  The  loss  or  gain  on  a  business,  the  books  of  which  are  kept  by  Single  Entry,  is  found 
by  finding  the  Present  Worth  and  comparing  this  with  the  Present  Worth  at  the  time  the  business 
was  started  or  with  the  Present  Worth  at  the  beginning  of  the  period  for  which  the  calculation  is 
made.  The  amount  that  the  Present  Worth  now  exceeds  the  former  Present  Worth,  is  the  amount 
of  the  gain,  or  the  amount  that  the  former  Present  Worth  exceeds  the  present  Present  Worth, 
is  the  amount  of  the  loss.  The  Proprietor's  account  should,  of  course,  be  credited  with  the  gain 
or  debited  with  the  loss  according  to  the  facts  in  the  case.  The  loss  or  gain  on  any  business  should 
be  determined  at  least  once  a  year.  To  find  the  Present  Worth  when  books  are  kept  by  Single 
Entry  make  an  Inventory  of  all  property  and  goods  of  every  description  on  hand  owned  by  the 
business,  including  Real  Estate,  Merchandise,  Cash,  etc.,  and  to  this  add  all  good  Notes  Receiv- 
able and  all  good  Accounts  Receivable,  then  from  the  total  subtract  the  total  liabilities  of  the 
business,  which  will  probably  consist  chiefly  of  Notes  Payable  and  Accounts  Payable. 

213.  Since  in  Single  Entry  Bookkeeping,  debits  and  credits  are  made  with  no  reference  to 
each  other,  it  will  only  be  by  coincidence  or  accident  if  the  sum  of  the  debits  and  the  sum  of  the 
credits  on  the  books  are  ever  equal,  and  consequently,  Trial  Balances  are  not  taken  when  books 
are  kept  by  Single  Entry  but  the  "Proof  of  Posting"  hereinbefore  described  should  be  used  and 
this  is  sometimes  called  a  Trial  Balance. 

214.  One  of  the  chief  advantages  of  Double  Entry  Bookkeeping  is  that  if  any  entry  is  made 
incorrectly  by  mistake,  or  if  some  entry  is  omitted  through  an  oversight,  the  books  are  almost 
sure  to  be  thrown  out  of  balance  by  the  mistake  or  omission,  which  fact  being  discovered  when  a 
Trial  Balance  is  taken,  the  bookkeeper  hunts  until  he  finds  the  mistake  or  omission,  or  as  many 
mistakes  and  omissions  as  there  may  be,  and  corrects  them.  The  Double  Entry  system  thus 
serves  as  a  check  on  the  work,  and  enables  the  bookkeeper  and  his  employer  to  be  more  certain 
that  a  complete  and  correct  record  is  kept  of  all  transactions.  Another  of  the  chief  advantages  of 
Double  Entry  bookkeeping  is  that  it  presents  in  concise  form  an  analysis  of  the  sources  of  gains 
and  losses,  through  the  study  of  which  a  capable  manager  is  able  to  decrease  his  losses  and  in- 
crease his  gains. 

Changing  from  Single  Entry  to  Double  Entry. 

215.  If  you  have  completed  the  work  up  to  this  point  in  this  text-book  and  have  read  the 
explanation  of  Single  Entry  Bookkeeping  given  in  articles  199  to  214  inclusive  two  or  three  times, 
you  can  keep  books  by  Single  Entry,  using  just  whatever  books  and  whatever  accounts  an  em- 
ployer may  desire,  without  further  instruction  or  illustration. 

The  next  thing  for  you  to  learn  is — how  to  change  the  bookkeeping  of  a  firm  from  Single 
Entry  to  Double  Entry.  When  this  is  to  be  done,  the  best  way  to  do  it  is  to  calculate  the  loss  or 
gain  according  to  the  old  books,  apportion  same  among  the  members  of  the  firm,  and  then  open 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        195 

an  entirely  new  set  of  books,  according  to  the  direction  in  articles  50  and  51  of  this  book.  Find  the 
resources  and  liabilities  for  the  preliminary  statement  by  taking  an  inventory  of  all  property  on 
hand  and  by  consulting  the  old  books  and  the  managing  member  of  the  firm. 

216.  If  it  is  desired  that  the  new  set  of  books  shall  be  a  continuation  of  the  old,  take  an  in- 
ventory, make  a  statement  showing  all  the  resources  and  liabilities  of  the  firm,  and  find  the  present 
worth  of  the  firm  by  subtracting  its  liabilities  from  its  resources.  If  the  present  worth  of  the  firm 
is  more  than  at  the  time  the  books  were  opened,  credit  the  proprietor's  account  for  the  amount  of 
the  gain;  if  the  present  worth  is  less  than  at  the  time  the  books  were  opened,  debit  the  proprietor's 
account  for  the  loss.  This  having  been  done,  it  will  only  be  necessary  to  make  Journal  entries  for 
the  accounts  not  already  in  the  Ledger. 

The  entries  are  made  from  the  statement  of  resources  and  liabilities  and  are  posted  from  the 
Journal  to  the  new  accounts  in  the  Ledger.  The  appropriate  accounts  are  debited  for  all  resources 
not  already  in  the  Ledger,  and  the  appropriate  accounts  are  credited  for  all  liabilities  not  already 
in  the  Ledger.  Then  the  Journal  debit  may  be  made  for  the  cash  on  hand  as  per  the  Cash  Book, 
after  which  all  of  the  debits  already  in  the  Ledger  may  be  grouped  under  the  heading  "Ledger 
Debits"  in  making  the  opening  Journal  entry,  and  all  of  the  credits  already  in  the  Ledger  may  be 
grouped  under  the  head  "Ledger  Credits;"  and  when  the  above  entries  have  been  made,  the  Journal 
entries  will  balance  and  the  books  will  be  in  balance,  since  all  of  the  firm's  resources  now  appear 
on  the  books  as  debits  and  all  of  its  liabilities  appear  on  the  books  as  credits,  and  the  difference 
between  those  two,  the  firm's  present  worth,  also  appears  on  the  books  as  a  credit  in  the  Stock 
account.  The  totals  appearing  in  the  Journal  entry,  "Ledger  Debits"  and  "Ledger  Credits" 
are,  of  course,  not  posted,  since  they  are  already  in  the  Ledger.  The  new  accounts  to  be  opened 
and  debited  with  resources  may  include — a  Merchandise  Account,  a  Store  and  Office  Fixtures 
Account,  a  Bills  Receivable  Account,  and  possibly  an  Expense  Account,  if  those  accounts  were 
not  kept  in  the  Single  Entry  books,  together  with  any  other  accounts  needed  in  classifying  the 
firm's  resources;  and  the  new  accounts  showing  liabilities  may  include — a  Bills  Payable  account, 
if  such  an  account  was  not  kept  in  the  old  books  and  there  are  any  outstanding  notes  owed  by  the 
firm,  together  with  any  other  accounts  needed  to  show  liabilities  not  previously  shown  on  the  books. 

Having  gotten  thus  far,  the  only  thing  remaining  to  be  done,  is  to  take  a  Trial  Balance,  to  make 
sure  that  you  have  done  everything  correctly  and  that  the  books  are  in  balance,  and  you  may  then 
proceed  to  keep  your  books  by  Double  Entry,  just  as  though  they  had  been  orginally  opened  in 
that  system. 

217.  In  order  to  prove  that  you  know  how  to  keep  books  by  Single  Entry,  you  may  turn  to 
the  Wholesale  Paper  Set,  beginning  on  page  1 14,  and  keep  the  books  for  the  first  fifteen  days'  bus- 
iness by  Single  Entry,  using  a  Cash  Book,  Journal  and  Ledger,  and  keeping  only  Proprietors' 
Accounts,  Bills  Receivable  and  Bills  Payable  accounts,  a  Cash  Account,  and  the  necessary  personal 
accounts.  At  the  close  of  the  fifteen  days'  business,  the  inventories  there  given  may  be  used  and 
you  may  change  the  books  to  Double  Entry,  and  take  a  Trial  Balance,  and  submit  it  and  your 
Single  Entry  work  to  your  teacher. 

WRITTEN  TEST  NO.  17. 

1.  Define  Single  Entry;  Double  Entry. 

2.  How  do  the  two  systems  differ? 

3.  Which  class  of  accounts  do  you  keep  in  a  Single  Entry  Ledger? 

4.  What  is  the  difference  between  a  Double  Entry  Ledger  and  a  Single  Entry  Ledger? 

5.  How  about  the  Journal  entries? 

6.  Are  the  personal  accounts  kept  differently  than  those  of  Double  Entry?     Why? 

7.  May  other  than  personal  accounts  be  kept  in  Single  Entry?     Explain. 

8.  Is  the  capital  account  a  personal  account? 

9.  Could  the  footings  of  the  two  sides  of  the  Ledger  ever  agree? 


196        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

10.  Why  can  not  a  Trial  Balance  be  taken  the  same  as  in  Double  Entry?  Explain  fully 
how  a  Trial  Balance  can  be  taken  off  a  Single  Entry  Ledger. 

11.  Why  are  other  than  personal  accounts  kept? 

12.  Explain  how  a  Statement  of  Gains  and  Losses  may  be  prepared  from  a  Single  Entry 
Ledger?     Can  the  Net  Gain  or  Net  Loss  be  determined?     How? 

13.  Does  the  Cash  Book  differ  from  a  Double  Entry  Cash  Book?  Explain.  How  is  it 
posted?    Are  all  the  entries  posted? 

14.  What  is  a  Bill  Book?  Should  the  balances  agree  with  any  accounts  kept  in  a  Double 
Entry  Ledger?  In  a  Single  Entry  Ledger?  What  advantage  is  derived  from  the  use  of  the  Bill 
Book?    May  you  post  from  it  to  the  Ledger? 

15.  When  you  have  a  note  discounted  at  bank,  what  entry  or  entries  do  you  make,  when  it 
is  some  other  person's  note?  WThen  it  is  your  own  note?  When  you  discount  (buy)  another  per- 
son's note? 

16.  What  entry  or  entries  should  be  made  in  Single  Entry  when  a  person  fails,  paying  only 
40  cents  on  the  dollar?    In  Double  Entry  Bookkeeping? 

17.  Name  the  successive  steps  in  changing  books  from  Single  Entry  to  Double  Entry. 

18.  Why  is  a  Trial  Balance  taken  after  the  change  to  Double  Entry  is  made? 

19.  Which,  in  your  opinion,  is  the  better  system,  Double  or  Single  Entry,  say,  for  a  manu- 
facturer; a  doctor;  a  lawyer? 

20.  What  are  the  main  facts  that  a  man  wishes  to  know  regarding  his  business? 

COMMISSION  BOOKKEEPING. 

218.  In  every  city  there  are  a  number  of  business  men  known  as  Commission  Merchants. 
A  Commission  Merchant  does  not  buy  or  own  the  goods  he  sells  but  receives  shipments  of  goods 
from  others  which  he  sells  for  the  highest  price  that  he  can  obtain  and  for  his  services  in  making 
the  sale,  he  receives  a  commission,  usually  a  certain  percentage  of  the  price  received  for  the  goods. 

219.  One  business  which  is  conducted  almost  exclusively  by  commission  merchants  is  the 
produce  business  and  the  commission  merchants'  success  in  this  business  will  depend  largely  upon 
whether  or  not  he  can  secure  a  sufficient  number  of  consignments  for  sale.  A  commission  mer- 
chant who  gets  good  prices  for  what  he  sells  and  who  remits  the  proceeds  promptly  to  the  person 
from  whom  the  goods  were  received,  soon  builds  up  a  good  reputation  and  consequently  receives 
frequent  and  extensive  shipments  from  farmers  who  raise  produce  in  large  quantities;  from  buyers 
who  make  a  business  of  traveling  through  the  country  and  buying  up  produce  for  shipment  to  the 
city;  and  from  country  stores  which  must  find  some  outlet  for  the  produce  taken  in  trade  or  barter 
from  their  customers. 

220.  The  goods  shipped  to  a  commission  merchant  for  sale  are  called  "Shipments"  by  the 
person  shipping  the  goods  and  a  separate  account  is  opened  by  the  shipper  with  each  shipment 
under  an  appropriate  name  such  as  "Shipment  (name  of  the  person  to  whom  the  shipment  was 
sent)."  In  the  event  of  more  than  one  shipment  being  sent  to  the  same  person,  the  shipments 
would  be  distinguished  by  numbers  as  "Shipment  (name  of  the  person  to  whom  the  shipment  was 
sent)  number  1,"  "Shipment  (name  of  the  person  to  whom  the  shipment  was  sent)  number  2," 
etc.  When  a  shipment  is  sent,  the  account  with  the  shipment  should  be  debited  with  the  cost  of 
the  goods  shipped  and  with  any  expense  incurred  in  the  making  of  the  shipment  such  as  drayage  or 
insurance,  if  the  goods  are  insured,  or  with  freight  or  express,  if  the  freight  or  expressage  is  prepaid. 
The  account  with  a  shipment  should  be  credited  with  all  proceeds  received  on  account  of  the  ship- 
ment. If  the  commission  merchant  does  not  make  any  payment  until  the  goods  have  all  been 
sold  and  then  sends  a  check  or  a  bank  draft  in  full  for  the  net  proceeds,  that  is,  for  the  amount  for 
which  the  goods  were  sold  less  any  expenses  incurred  by  the  commission  merchant  and  less  the 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        197 

oommission  merchant's  commission,  Cash  is  debited  and  the  shipment  is  credited  for  the  amount 
received.  If,  as  is  frequently  the  case,  the  commission  merchant  accepts  the  shipper's  time  draft  or 
pays  his  sight  draft  on  him  for  a  part  of  the  value  of  the  goods,  Cash  or  Bills  Receivable,  depend- 
ing upon  whether  the  draft  in  question  is  a  sight  draft  or  a  time  draft,  is  debited  and  the  shipment 
is  credited  for  the  amount  of  the  draft  and  then  when  the  Account  Sales  is  received  with  the  re- 
mittance of  the  remainder  of  the  amount  due  for  the  goods,  Cash  is  debited  and  the  shipment  is 
credited  with  that  amount.  If  the  commission  merchant  in  sending  the  Account  Sales  does  not 
send  a  remittance,  but  simply  says  that  the  amount  due  has  been  placed  to  the  credit  of  the  ship- 
per, the  shipper  should  open  an  account  with  the  commission  merchant  as  "(commission  mer- 
chant's name)  agent"  or  "  (commission  merchant's  name)  bailee"  and  through  a  proper  Journal 
entry  should  debit  that  account  and  credit  the  shipment  for  the  amount  due  as  shown  by  the  Ac- 
count Sales.  The  reason  for  using  "agent"  or  "bailee" in  connection  with  a  commission  merchant's 
name  in  a  case  of  this  kind,  is  to  show  that  the  commission  merchant  is  a  custodian  of  funds  belong- 
ing to  the  shipper  so  that  in  the  event  of  the  commission  merchant  failing  before  remitting,  the 
shipper  would  be  a  preferred  creditor  and  could  recover  the  full  amount  due  him  if  the  assets  avail- 
able would  permit  of  this  instead  of  being  compelled  to  accept  a  pro  rata  share  of  the  assets  along 
with  the  ordinary  creditors. 

221.  When  all  of  the  proceeds  from  any  shipment  have  been  received,  the  account  should 
be  closed  into  the  Shipments  account  through  a  proper  Journal  entry,  debiting  the  individual 
shipment  and  crediting  the  Shipments  account  if  there  has  been  a  gain  or  crediting  the  individual 
shipment  and  debiting  the  Shipments  account  if  there  has  been  a  loss  on  the  shipment. 

222.  By  the  commission  merchant  receiving  the  goods,  each  lot  of  goods  received  is  called 
a  Consignment.  (The  person  shipping  the  goods,  is  the  consignor  and  the  person  receiving  the 
goods,  is  the  consignee.)  The  consignor  is  the  owner  of  the  goods  until  the  commission  merchant 
has  sold  them.  When  a  consignment  arrives,  it  is  given  a  lot  number  which  is  stenciled  on  the 
barrels,  bales,  boxes,  crates  or  packages,  making  up  the  consignment,  or  indicated  by  tags  or  plac- 
ards laid  on  or  attached  to  the  goods  composing  the  consignment  and  thereafter  the  consignment 
is  referred  to  only  by  its  lot  number.  The  lot  number  may  consist  of  simply  the  number  of  the 
consignment  according  to  the  order  of  its  receipt  or  of  the  initial  of  the  consignor's  name  with  the 
figure  indicating  the  number  of  the  consignment  received  from  him  or  of  any  other  mark  or  sign 
which  will  enable  the  commission  merchant  to  easily  distinguish  the  property  belonging  to  one  con- 
signment from  that  belonging  to  any  other  consignment.  One  of  the  chief  reasons  for  the  use  of 
lot  numbers  in  the  commission  business  is  to  hide  the  source  of  the  commission  merchants's  supply 
from  his  competitors  and  customers. 

223.  Books  commonly  used  in  the  commission  business  are  a  blotter  or  receiving  book  in 
which  the  receiving  clerk  enters  a  description  of  each  lot  of  goods  received  together  with  the  name 
and  address  of  the  shipper  and  the  lot  number,  a  Cash  Book,  a  Journal,  a  Consignment  Ledger,  a 
Customers'  Ledger  and  a  General  Ledger. 

224.  From  the  blotter  or  receiving  book  the  bookkeeper  opens  an  account  in  the  Consign- 
ment Ledger  with  each  person  from  whom  a  consignment  is  received,  writing  as  the  heading  of 
the  account,  the  lot  number  and  the  name  and  address  of  the  consignor.  There  is  a  separate 
account  in  the  Consignment  Ledger  for  every  consignment  received.  After  the  heading  has  been 
written  in  the  Consignment  Ledger,  the  bookkeeper  copies  from  the  receiving  book  a  description 
of  the  goods  received;  then  the  account  is  ready  for  such  entries  as  may  be  posted  to  it  later. 

225.  In  the  commission  business,  it  is  customary  for  the  commission  merchant  to  pay  or 
advance  the  freight  or  express  charges  upon  receipt  of  the  goods  and  also  the  drayage  charges  for 
bringing  the  goods  from  the  wharf  or  freight  station  to  his  ware-house.  These  charges,  when  paid, 
are  entered  on  the  credit  side  of  the  Cash  Book  with  an  appropriate  explanation  including  the  lot 
number  and  are  posted  to  the  debit  side  of  the  account  for  that  lot  number  in  the  Consignment 
Ledger. 


198        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

226.  Not  infrequently  the  commission  merchant  makes  advances  to  the  consignor  upon 
receipt  of  a  consignment.  If  the  advance  is  in  the  form  of  a  cash  remittance  or  the  payment  of 
a  sight  draft,  the  amount  of  the  advance  is  entered  on  the  credit  side  of  the  Cash  Book  and  is  posted 
to  the  debit  side  of  the  lot  account  concerned  in  the  Consignment  Ledger.  If  the  advance  is 
made  by  accepting  a  time  draft,  an  appropriate  entry  is  made  in  the  Journal,  debiting  the  lot 
account  and  crediting  the  Bills  Payable  account,  this  Journal  entry  being  posted  with  appropriate 
explanation  to  the  debit  side  of  the  proper  lot  account  in  the  Consignment  Ledger  and  to  the 
credit  side  of  Bills  Payable  account  in  the  General  Ledger. 

227.  Whenever  any  of  the  goods  from  any  lot  are  sold  for  cash,  the  amount  received  is  entered 
on  the  debit  side  of  the  Cash  Book  with  an  appropriate  explanation  including  the  lot  number  and 
this  is  posted  to  the  credit  side  of  the  account  for  that  particular  lot  in  the  Consignment  Ledger. 

228.  It  is  customary  for  the  commission  merchant  to  carry  insurance  covering  the  goods  in 
his  warehouse  and  in  order  to  reimburse  himself  for  the  premium  that  he  pays  to  the  Fire  In- 
surance Companies,  he  makes  a  charge  for  insurance  against  each  consignment  received.  The 
entry  for  the  charge  for  insurance  is  made  in  the  Journal.  The  lot  is  debited  and  insurance  is 
credited  with  the  amount  of  the  charge.  The  debit  to  the  lot  concerned  is  posted  to  the  debit 
side  of  the  proper  lot  account  in  the  Consignment  Ledger  and  the  credit  to  insurance  is  posted  to 
the  credit  side  of  the  Insurance  account  in  the  General  Ledger. 

229.  If  there  is  any  other  charge  against  a  consignment  not  paid  in  cash,  such  as  a  charge 
for  storage,  it  is  entered  in  the  Journal  and  posted  just  like  the  insurance  item  above  mentioned. 

230.  If  instead  of  paying  the  freight  or  the  dray  age  in  cash,  the  commission  merchant  has  an 
account  with  the  railroad  or  an  account  with  the  drayman,  the  entry  for  such  a  charge  would  be 
made  through  the  Journal,  the  lot  account  being  debited  and  the  railroad  or  the  drayman  being 
credited.  This  Journal  entry  would  be  posted  to  the  lot  account  in  the  Consignment  Ledger  and 
to  the  railroad's  or  drayman's  account  in  the  General  Ledger. 

231.  If  any  part  of  a  consignment  should  be  sold  on  credit,  the  entry  would  be  made  through 
the  Journal.  The  purchaser  would  be  debited  and  the  lot  account  would  be  credited  with  a  proper 
explanation.  This  Journal  entry  would  be  posted  to  the  debit  side  of  the  purchaser's  account  in 
the  Customer's  Ledger  and  to  the  credit  side  of  the  lot  account  in  the  Consignment  Ledger. 

232.  When  all  of  the  goods  from  a  consignment  have  been  sold,  the  commission  is  figured 
and  a  Journal  entry  is-  made,  debiting  the  lot  account  and  crediting  the  Commission  account  with 
the  amount  of  the  commission.  This  Journal  entry  is  posted  to  the  debit  side  of  the  lot  account 
in  the  Consignment  Ledger  and  to  the  credit  side  of  the  Commission  account  in  the  General  Ledger. 

233.  When  all  of  the  goods  from  any  consignment  have  been  sold  and  the  entries  from  the  Cash 
Book  and  Journal,  including  the  Commission  and  all  other  charges,  have  all  been  properly  posted 
to  the  lot  account,  the  amount  that  the  credit  side  of  this  account  exceeds  the  debit  side,  is  the 
amount  of  the  net  proceeds.  If  the  net  proceeds  are  sent  at  once  to  the  consignor,  the  entry  for 
the  remittance  will  be  on  the  credit  side  of  the  Cash  Book  with  a  proper  explanation  including  the 
lot  number  and  will  be  posted  to  the  debit  side  of  the  lot  account.  If  the  net  proceeds  are  not  sent 
to  the  consignor  immediately,  a  Journal  entry  should  be  made,  debiting  the  lot  account  and  credit- 
ing the  consignor  as  bailor.  When  either  the  Cash  Book  entry  or  the  Journal  entry  above  men- 
tioned has  been  properly  posted,  the  lot  account  in  the  Consignment  Ledger  will  balance  and 
should  be  ruled  up. 

234.  Whenever  the  goods  from  any  consignment  have  all  been  sold,  the  commission  merchant 
should  immediately  forward  an  Account  Sales  to  the  shipper  or  consignor.  An  Account  Sales  con- 
sists of  an  itemized  statement  of  all  transactions  in  connection  with  the  consignment  for  which  the 
Account  Sales  is  rendered.  It  should  show  at  the  top  every  sale  made  from  the  consignment  with 
the  price  received  in  each  case  and  the  total  amount  received  from  the  sale  of  the  consignment. 
At  the  bottom  it  should  show  all  expenses  and  charges  in  connection  with  the  consignment,  includ- 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


199 


ing  advances  to  the  consignor,  if  any;  the  amount  of  the  commission  charged  by  the  commission 
merchant  and  the  net  proceeds  forwarded  to  the  consignor  along  with  the  Account  Sales  or  placed 
to  the  consignor's  credit.  4 

235.  If  at  the  time  of  taking  a  Trial  Balance,  the  debit  side  of  any  account  in  the  Consign- 
ment Ledger  is  larger  than  the  credit  side,  the  amount  of  the  excess  is  a  resource;  it  represents 
expenditures  or  advances  for  which  you  will  be  reimbursed.  But  if  at  any  time  the  credit  side  of 
an  account  in  the  Consignment  Ledger  exceeds  the  debit  side,  the  amount  of  the  excess  is  a  liability. 
This  excess  represents  funds  in  your  hands  belonging  to  the  consignor. 

Account  Sales. 


ACCOUNT  SALES 

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Sold  ForAccount  Of 
Wm.   E.   Smith, 


FRUITIPMIIIE 


Bridgeville, 

.Del. 

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_iuljL_30, 

.40- 

504 

Crates  Peaches 

SALES 

7/26 

300 

Crates  Peaches 

0     §3.25 

450 

7/37 

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230 

7/29 

204 

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408 

1 

ADVANCES 

500 

1 

EXPRESS 

FREIGHT 

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1 

COMMISSION 

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40 

FADF 

NET   PROCEEDS 

447 

93 

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1088 

in 

200        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

SET  9. 

GENERAL  COMMISSION  BUSINESS. 

and  A.  E.  Trader  have  entered  into  partnership,  July  1st,  for 


(Student's  name) 

the  purpose  of  conducting  a  general  commission  business,  each  investing  $5,000  cash.     Style  of 
firm  to  be &  Trader.     Gains  or  losses  to  be  shared  equally.     Both 

(Student's  name) 

partners  to  devote  their  entire  time  to  the  business.     Partnership  to  run  for  three  years.     Draw 
up  a  partnership  agreement. 

In  this  set  use  the  following  accounts:  Store  and  Office  Fixtures,  Insurance,  Commission, 
Stock,  Private,  A.  E.  Trader,  Stock,  A.  E. 


(Student's  name;  (Student's  name) 

Trader,  Private,  and  the  necessary  personal  accounts. 

All  transactions  are  for  cash  unless  otherwise  stated. 

JULY  1,  19—. 

Buy  desk  and  chairs,  $145. 

Buy  typewriter  and  stand,  $105. 

Buy  blank  books  and  stationery,  $38.50. 

Receive  consignments  from  the  following  persons: 

R.  A.  Long,  Beaufort,  S.  C,  (Consignment  No.  1)  40  tons  Timothy  hay;  freight  on  same 
drayage  $10.     Sell  same  at  $16  per  ton,  Commission  $44.80. 

F.  Jenkins,  Hillensburg,  N.  C,  (Consignment  No.  2)  225  bbls.  Family  Flour;  freight  on 
same,  $56;  drayage  $6;  insurance  $1.50. 

Baker  &  C6.,  Staunton,  Va.,  (Consignment  Nov  3)  15  tons  mill  feed;  freight,  $15,  drayage, 
$5*,  insurance,  $1.50. 

C.  P.  Ridgeway,  Ridgeway,  W.  Va.,  (Consignment  No.  4)  30  crates,  900  doz.  eggs;  expressage, 
$37.50,  drayage,  $2.50.     Sell  entire  lot  at  13^  per  doz.,  our  commission  5%. 

Take  out  Insurance  Policy  in  the  Hartford  Insurance  Co.  to  the  amount  of  $5,000  at  \%. 

Remit  to  R.  A.  Long,  net  proceeds  from  consignment  No.  1,  $547.20. 

Remit  to  C.  P.  Ridgeway,  net  proceeds  from  consignment  No.  4. 

2. 

Receive  the  following  consignments: 

W.  A.  O'Rear,  Clear  Brook,  Va.,  (Consignment  No.  5)  500  bu.  No.  1  Red  Wheat;  freight, 
$17.50,  insurance,  $1.25. 

J.  G.  Haldermann,  Kernstown,  Va.,  (Consignment  No.  6)  20  boxes  butter,  40  lbs.  each;  freight, 
$3.20,  drayage,  $1.25.     Sell  same  at  18^  per  lb.,  $144.     Our  commission,  $7.20. 

S.  B.  McClung,  Upper  Tract,  W.  Va.,  (Consignment  No.  7)  1,500  lbs.  Wool;  freight,  $26.25, 
drayage  $3.25,  insurance  $1. 

Sell  to  Davis  Bros.,  on  %,  100  bbls.  Family  Flour,  from  consignment  No.  2,  at  $3.15  per  bbl. 

Sell  to  Albert  Lewis,  on  %,  5  tons  mill  feed,  from  consignment  No.  3,  at  $15  per  ton. 

Remit  to  J.  G.  Haldermann,  settlement  for  consignment  No.  6. 

3. 

Sell  to  James  Jackson,  on  %,  300  bu.  wheat  from  consignment  No.  5,  for  which  we  receive 
72^  per  bu. 

Sell  to  Samuel  Jones,  on  %,  200  bu.  wheat  from  consignment  No.  5,  72ji  per  bu.  Our 
commission  is  5%  of  sales. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        201 


We  receive  the  following  consignments: 

Hottle  &  Smith,  Alexandria,  Va.,  (Consignment  No.  8)  3,425  bu.  wheat;  freight,  $90,  insur- 
ance $2.25. 

Jones,  Robinson  &  Co.,  Brunswick,  Md.,  (Consignment  No.  9)  360  lbs.  chickens,  10  cases  eggs, 
30  doz.  to  case.     Expressage,  $21.85. 

W.  A.  McGee,  Hanover,  Pa.,  (Consignment  No.  10)  500  bu.  potatoes,  freight,  $10,  drayage, 
$2.50. 

Remit  to  W.  A.  O'Rear,  $323.25  in  payment  for  consignment  No.  5. 

Sell  to  John  W.  Adams,  on  %,  3  coops  chickens  from  consignment  No.  9,  185  lbs.  at  18^  per 
lb.,  and  3  crates  eggs,  90  doz.,  at  13^  per  doz. 

Sell  to  Henry  Brooke,  on  %,  1  coop,  55  lbs.  chickens  from  consignment  No.  9,  at  18^,  and, 

2  cases  eggs,  60  doz.,  at  13ff. 

Sell  to  James  Goodwin,  on  %,  2  coops  chickens,  120  lbs.,  from  consignment  No.  9,  at  18^. 
Sell  to  Frank  Meyers,  on  %,  5  cases  eggs,  150  doz.,  at  13|^  per  doz.     Our  commission  is  5% 
on  sales. 

Remit  to  Jones,  Robinson  &  Co.,  $77.47  in  settlement  for  consignment  No.  9. 

5. 

Receive  the  following  consignments: 

L.  J.  Andrews,  Bethlehem,  Md.,  (Consignment  No.  11)  25  lbs.  butter  and  6  cases  eggs,  30 
doz.  to  case;  freight,  $2.50,  drayage,  $1. 

L.  J.  Andrews,  (Consignment  No.  12)  20  tons  Timothy  hay;  freight,  $15,  drayage,  $5.75,  in- 
surance, $1.25. 

W.  W.  Wall,  Winchester,  Va.,  (Consignment  No.  13)  50  tons  Timothy  hay  and  10  tons  wheat 
straw;  freight,  $42,  drayage,  $10,  insurance,  $1.75. 

George  Bowers,  Martinsburg,  W.  Va.,  (Consignment  No.  14)  250  bbls.  flour;  freight,  $62.50, 
drayage,  $12.75,  insurance,  $1.60. 

Sell  to  Louis  Abel,  for  cash,  100  bbls.  flour  from  consignment  No.  2  at  $3.15  per  bbl.,  from 
consignment  No.  10,  50  bu.  potatoes  at  75^  per  bu.  and  from  consignment  No.  11,  2  cases,  60  doz. 
eggs,  at  13|^  per  doz. 

Sell  to  Wm.  Andrae,  on  %,  25  bbls.  flour  from  consignment  No.  2,  at  $3.15  per  bbl  ;  15  lbs. 
butter  from  consignment  No.  11,  at  18^  per  lb. 

Sell  to  Harry  Jones,  on  %,  from  consignment  No.  14,  50  bbls.  flour  at  $3.15  per  bbl.  and  from 
consignment  No.  13,  2  tons  Timothy  hay  at  $16. 

Sell  to  George  Brown,  on  %,  from  consignment  No.  14,  50  bbls.  flour  at  $3.15. 

Sell  to  Frank  Holtman,  on  %,  10  lbs.  butter  from  consignment  No.  11,  at  18j£  per  lb.,  and 

3  cases,  90  doz.  eggs,  from  consignment  No.  11,  at  13^  per  doz.,  and  from  consignment  No.  13,  5 
tons  Timothy  hay  at  $16  per  ton. 

Sell  to  John  Carver,  for  cash,  from  consignment  No.  10,  30  bu.  potatoes  at  75^  per  bu.  and  1 
case,  30  doz.  eggs,  at  13|^  per  doz.,  from  consignment  No.  11. 

Remit  to  F.  Jenkins,  $602.72  in  settlement  for  consignment  No.  2,  our  commission  being  6%. 
Remit  to  L.  J.  Andrews,  $23.86  in  settlement  for  consignment  No.  11,  commission  5%. 

6. 

Pay  clerk  and  stenographer  their  salaries  for  week,  $22. 

Receive  the  following  consignments: 

Baker  &  Co.,  (Consignment  No.  15)  1,200  bu.  corn;  freight,  $78.40,  drayage,  $10.25,  insur- 
ance, $1.60. 

Turner  &  Son,  Betterton,  Md.,  (Consignment  No.  16)  125  bbls.  apples  and  300  baskets 
peaches;  freight,  $90,  drayage,  $15. 


202        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Sell  from  consignment  No.  13,  25  tons  Timothy  hay  to  W.  F.  Riley,  on  %,  at  $16  per  ton, 
and  from  consignment  No.  10,  150  bu.  potatoes  at  75j£  per  bu.;  from  consignment  No.  15,  125  bu. 
corn  at  46^  per  bu. 

Sell  to  Casper  Alt,  for  cash,  125  baskets  peaches  from  consignment  No.  16,  at  $1.50  per  basket. 

Sell  to  Frank  Holtman,  for  cash,  from  consignment  No.  16,  175  baskets  peaches  at  $1.50  per 
basket. 

Sell  to  James  Lake,  on  %,  from  consignment  No.  13,  18  tons  Timothy  hay  at  $16  per  ton; 
from  consignment  No.  3,  5  tons  mill  feed  at  $15  per  ton;  and  from  consignment  No.  13,  10  tons 
wheat  straw  at  $6  per  ton. 

Remit  to  W.  W.  Wall,  $754.65  in  settlement  for  consignment  No.  13. 

Post  your  books  at  this  point  and  take  a  Trial  Balance. 

Be  sure  to  have  your  books  examined. 

8. 

draws  $50  for  private  use. 


(Student's  name) 

Sell  to  Wm.  Lea  &  Sons,  on  %,  from  consignment  No.  8,  1,234  bu.  wheat  at  72j£  per  bu. 

Sell  to  C.  A.  Gambrill  Mfg.  Co.,  on  %,  2,191  bu.  wheat  from  consignment  No.  8,  at  72j£  per  bu. 

Receive  the  following  consignments: 

Baker  &  Co.,  (Consignment  No.  17)  5,327  bu.  wheat;  freight,  $112.60,  insurance,  $2.60. 

F.  H.  Baker,  Fisher  Hill,  Va.,  (Consignment  No.  18)  175  lbs.  butter,  50  crates  eggs,  30  doz. 
each,  and  12  coops,  720  lbs.  chickens;  freight  $5.50,  drayage,  $2.25. 

D.  S.  Siegle,  Easton,  Md.,  (Consignment  No.  19)  6  coops,  480  lbs.  ducks  and  3  coops,  182 
lbs.,  chickens;  freight  $2.75,  drayage  $1. 

Remit  net  proceeds  on  consignment  No.  8,  our  commission  on  the  same  being  6%  on  the  total 
amount  of  sales. 

9. 

Sell  to  Charlottesville  Woolen  Mills,  Charlottesville,  Va.,  for  cash,  from  consignment  No.  7, 
1,500  lbs.  wool  at  18j£  per  lb.  Our  commission  on  this  consignment  was  5%.  We  remit  net  pro- 
ceeds. 

Sell  to  Parsons  &  Co.,  for  cash,  from  consignment  No.  3,  5  tons  mill  feed  at  $15  per  ton. 

After  deducting  6%  commission  and  expenses  on  consignment  No.  3,  remit  net  proceeds. 

Sell  to  Charles  H.  Brown,  for  cash,  from  consignment  No.  16,  30  bbls.  apples  at  $1.50  per  bbl.; 
125  lbs.  chickens,  from  consignment  No.  18,  at  15^  per  lb.,  and  25  crates  eggs,  30  doz.  each,  at 
13^  per  doz. 

Sell  to  Wm.  H.  Dill,  on  %,  from  consignment  No.  18,  150  lbs.  butter  at  lfy  per  lb.,  300  lbs. 
chickens  at  15^  per  lb. 

Sell  to  George  Brown,  for  cash,  from  consignment  No.  16,  50  bbls.  apples  at  $1.50  per  bbl. 
from  consignment  No.  18,  25  crates  eggs,  30  doz.  each,  at  13^  per  doz. 

Sell  to  Louis  Abel,  on  %,  from  consignment  No.  16,  45  bbls.  apples  at  $1.50  per  bbl.;  from  con- 
signment No.  18,  295  lbs.  chickens  at  15^  per  lb.,  and  25  lbs.  butter  at  18^  per  lb. 

Receive  from  Albert  Lewis,  check  in  full  of  %. 

Receive  consignment  from  D.  C.  Robinson,  Brucetown,  Va.,  710  bu.  oats;  freight  $18,  insur- 
ance $1.50. 

Remit  net  proceeds  for  consignment  No.  16,  our  commission  being  6%. 

Remit  net  proceeds  for  consignment  No.  18,  our  commission  being  5%. 

10. 
Sell  to  Thos.  Carpenter  for  cash,  from  consignment  No.  10,  75  bu.  potatoes  at  75j£  per  bu.; 


25  bbls.  flour  consignment  No.  14,  at  $3.15  per  bbl. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         203 

Sell  to  Katz  Bros.,  for  cash,  from  consignment  No.  14,  50  bbls.  flour  at  $3.15  per  bbl.;  182 
lbs.  chickens  at  15^  per  lb.,  from  consignment  No.  19;  50  bu.  potatoes  at  75£  per  bu.  from  consign- 
ment No.  10;  135  bu.  corn  at  46c1  per  bu.  from  consignment  No.  15. 

Sell  to  Miller  &  Son,  on  %,  from  consignment  No.  19,  230  lbs.  ducks  at  14^  per  lb.;  from  con- 
signment No.  10,  60  bu.  potatoes  at  75j£  per  bu.;  and  from  consignment  No.  15,  245  bu.  corn  at 
46ff  per  bu. 

Sell  to  George  Roth,  for  cash,  from  consignment  No.  19;  225  lbs.  ducks  at  14c1  per  lb. 

Receive  consignments  from  the  following: 

F.  C.  Grove,  Stephenson,  Va.,  75  lbs.  butter,  10  crates  eggs,  30  doz.  to  crate;  freight  $2, 
drayage  75c\ 

Maloney  &  Carter,  Charlotte,  N.  C,  25  crates  cantaloupes,  15  bbls.  onions;  freight  $2.35, 
drayage  $1. 

Sell  consignment  No.  22  to  M.  Sanders,  cantaloupes  at  $1.25  per  crate,  onions  85^  per  bbl. 
Commission,  $2.20  (5%).     Deduct  expenses  and  remit  net  proceeds. 

Pay  bill  for  advertising  const.  No.  12  in  the  "Sun,"  $10. 

11. 

Receive  the  following  consignments: 

J.  P.  Jarrett,  Strasburg,  Va.,  80  baskets  peaches,  50  bbls.  apples;  freight  $3.45,  drayage  $1.40. 

James  Robinson  &  Co.,  15  crates  tomatoes;  freight  $1.25,  drayage  75c\ 

Frazier  &  Bishop,  150  bbls.  flour;  freight,  $34.30,  drayage,  $10,  insurance,  $1.50. 

Sell  consignment  No.  21,  to  J.  Rosenburg,  for  cash,  75  lbs.  butter  at  18j£  per  lb.,  10  crates, 
300  doz.  eggs,  at  13|^  per  doz. 

Sell  consignment  No.  17  to  Washburn  Flour  Mills  Co.,  for  cash,  5,327  bu.  wheat  at  74^  per  bu. 

Sell  to  Harry  Jones,  on  %,  140  bu.  corn  at  46c1  per  bu.  from  consignment  No.  15;  and  from 
consignment  No.  14,  75  bbls.  flour  at  $3.15  per  bbl. 

Sell  to  Frank  Meyer,  for  cash,  from  consignment  No.  20,  150  bu.  oats  at  33j£  per  bu.;  from 
consignment  No.  10,  85  bu.  potatoes  at  75^  per  bu. 

Remit  net  proceeds  on  consignment  No.  10  our  commission  being  6%. 

Remit  to  George  Bowers  &  Co.,  net  proceeds  on  consignment  No.  14,  our  commission  being 
6%. 

Remit  proceeds  of  consignment  No.  17,  our  commission  being  6%. 

Buy  the  twenty  tons  of  Timothy  Hay,  belonging  to  consignment  No.  12,  Andrews,  at  $15.00, 
and  ship  the  goods  to  Cahall  &  Baynard,  Philadelphia,  Pa.,  to  be  sold  on  our  account  and  risk. 

Remit  to  L.  J.  Andrews  the  net  proceeds  from  consignment  No.  12,  our  commission  being  5%. 

Remit  net  proceeds  for  consignment  No.  21,  our  commission  being  5%. 

12. 

Pay  store  rent  to  July  10th,  19—,  $75. 

A.  E.  Trader  draws  $75  for  private  use. 

Make  the  following  sales: 

Wm.  Ortel,  for  cash,  from  consignment  No.  15,  200  bu.  corn  at  46^  per  bu.,  from  consignment 
No.  20,  85  bu.  oats  at  33c1  per  bu. 

J.  F.  Norwood,  on  %,  from  consignment  No.  20,  125  bu.  oats  at  33j£  per  bu.,  and  from  con- 
signment No.  23,  80  baskets  peaches  at  $1.50  per  basket. 

Sell  to  George  Roth,  for  cash,  from  consignment  No.  23,  50  bbls.  apples  at  $1 .50  per  bbl. ;  from 
consignment  No.  24,  15  crates  tomatoes  at  90^  per  crate. 

Receive  the  following  consignments: 

N.  A.  Nicodemus,  Edgemont,  Md.,  25  baskets  peaches,  75  bbls.  apples;  freight  $2.35,  drayage 
$1.60. 


204        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Turner  &  Son,  2,346  bu.  wheat;  demurrage  $2,  insurance,  $2. 

Remit  J.  P.  Jarrett  net  proceeds  for  consignment  No.  23,  our  commission  being  5%. 

Remit  to  Jones,  Robinson  &  Co.,  net  proceeds  of  consignment  No.  24,  our  commission  being 

5%. 

13. 

Pay  salaries  for  the  week,  $22. 

Receive  consignments  from  the  following  persons: 

D.  Seigel  &  Co.,  30  crates  cantaloupes,  10  baskets  cucumbers,  25  bunches  beets;  freight  $3.40, 
drayage  $1.25. 

Bill  &  Sunderland,  Ocean  City,  Md.,  200  watermelons;  freight  $8.10,  drayage  $2. 

J.  G.  Haldermann,  215  lbs.  butter,  10  crates  eggs;  freight  $4.20,  drayage  $2. 

Receive  from  Davis  Bros,  check  in  payment  of  account  in  full. 

Sell  to  Louis  Abel,  on  %,  200  bu  corn,  from  consignment  No.  15,  at  46^  per  bu.;  120  bu.oats 
from  consignment  No.  20  at  33c1  per  bu..  25  bbls.  flour  from  consignment  No.  25  at  $3.15  per  bbl. 

Sell  to  Wm.  H.  Dill,  on  %,  155  bu.  corn  from  consignment  No.  15  at*46j£  per  bu.;  100  water- 
melons, from  consignment  No.  29,  at  $25  per  100;  15  crates  cantaloupes  from  consignment  No. 
28  at  $1.25  per  crate;  3  baskets  cucumbers  from  consignment  No.  28  at  75c1  per  basket. 

Sell  to  John  Carver,  for  cash,  100  watermelons  from  consignment  No.  29,  at  $25  per  100;  5 
baskets  cucumbers  from  consignment  No.  28,  at  75^  per  basket  and  10  crates  cantaloupes  at  $1.25 
per  crate. 

Sell  to  Katz  Bros.,  for  cash,  75  bu.  oats  from  consignment  No.  20,  at  33j£  per  bu.;  50  lbs.  butter 
from  consignment  No.  30  at  18c1  per  lb. 

Sell  to  Thos.  G.  Carpenter,  for  cash,  25  baskets  peaches  at  $1.50  per  basket  and  10  bbls.  apples 
at  $1.50  per  bbl.,  from  consignment  No.  26;  5  crates  cantaloupes  at  $1.25  per  crate  and  2  baskets 
cucumbers  at  75^  per  basket  from  consignment  No.  28. 

Remit  net  proceeds  for  consignment  No.  15,  and  consignment  No.  29,  our  commission  in  each 
case  being  6%. 

15. 

Receive  bank  draft  from  Wm.  Lea  &  Son  in  full  of  their  account. 

Receive  consignments  from  the  following  persons: 

Ramsburg  &  Co.,  Frederick  Md.,  5  coops,  365  lbs.  chickens,  2  coops,  136  lbs.  ducks;  freight 
$3.25,  drayage  $1.10. 

Samuel  Hight,  Front  Royal,  Va.,  25  crates  eggs,  30  doz.  to  crate;  freight  $3.25,  drayage  $2.75 

Thos.  Harrison,  Lake  View,  Md.,  1,465  lbs.  wool;  freight  $25.86,  drayage  $3,  insurance  $1 

C.  B.  Crum,  Meadow  Mills,  Va.,  4,576  bu.  wheat;  freight,  $96.30,  insurance,  $2.50. 

C.  P.  Ridgeway,  20  tons  Timothy  hay;  freight,  $80.75;  drayage,   $10.40,  insurance,    $1.25 

Sell  to  Albert  Lewis,  on  %,  155  bu.  oats  at  33^  per  bu.,  from  consignment  No.  20;  50  bbls 
flour  at  $3.15  per  bbl.  from  consignment  No.  25. 

Sell  to  Henry  Brooke,  for  cash,  from  consignment  No.  26,  25  bbls.  apples  at  $1.50  per  bbl. 
from  consignment  No.  30,  85  lbs.  butter  at  18^  per  lb.;  from  consignment  No.  31,  136  lbs.  ducks 
at  14l£  per  lb. 

Remit  net  proceeds  for  consignment  No.  20.  Commission,  5%.  Storage,  $2.50.  Take  a 
Trial  Balance  at  this  point  and  submit  it  for  approval. 

16. 

Sell  to  Samuel  Elder,  on  %,  from  consignment  No.  25,  75  bbls.  flour  at  $3.15  per  bbl.;  from 
consignment  No.  26,  40  bbls.  apples  at  $1.50  per  bbl. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.       205 

Sell  to  James  Lake,  10  crates,  300  doz.  eggs,  at  13^  per  doz.,  from  consignment  No.  30,  and 
80  lbs.  butter  at  18^  per  lb. 

Sell  to  Washburn  Flour  Mill  Co.,  for  cash,  2,346  bu.  wheat  at  72^  per  bu.,  from  consignment 
No.  27. 

Sell  to  Miller  &  Son,  for  cash,  65  lbs.  chickens  from  consignment  No.  31  at  15^  per  lb. 

Receive  consignments  as  follows: 

A.  Wilson,  Bethesda,  Md.,  25  cases  eggs,  150  lbs.  butter;  freight  $10.50,  drayage  $3.25. 

Wm.  R.  Gilpin,  150  bu.  potatoes;  freight  $4.50,  drayage  $1.60. 

Remit  to  J.  G.  Haldermann  net  proceeds  for  consignment  No.  30,  our  commission  being  6%. 

Remit  to  Turner  &  Son,  net  proceeds  for  consignment  No.  27,  our  commission  being  6%. 

Receive  from  C.  A.  Gambrill  Mfg.  Co.,  check  in  full  of  account. 

17. 

Receive  the  following  consignments: 

George  Bowers  &  Co.,  800  bu.  corn;  freight  $62.50,  insurance  $1.60. 

Samuel  H.  Earp,  Elkridge,  Md.,  10  cases  eggs,  75  lbs.  butter;  freight  $2.25,  drayage  75^. 

S.  J.  Radcliffe  &  Son,  Ellicott  City,  Md.,  925  crates  cantaloupes,  7300  watermelons;  freight, 
$25.50,  drayage,  $5. 

Sell  John  W.  Adams,  for  cash,  136  lbs.  chickens  at  15j£  per  lb.,  from  consignment  No.  31;  5 
crates  eggs,  30  doz.  each,  at  13^  per  doz.,  from  consignment  No.  32,  50  bu.  potatoes  at  75^  per  bu. 
from  consignment  No.  37. 

Sell  Chas.  H-  Brown,  for  cash,  11  cases  eggs,  30  doz.  each,  at  13|^  per  doz.,  from  consignment 
No.  32;  50  lbs.  butter  at  18j£  per  lb.,  from  consignment  No.  36;  125  bu.  corn  at  46^  per  bu.  from 
consignment  No.  38. 

Sell  Frank  Holtman,  for  cash,  925  crates  cantaloupes  at  $1.25  per  crate,  4100  watermelons 
at  $25  per  100  from  consignment  No.  40. 

Sell  to  Charlottesville  Woolen  Mills,  1,465  lbs.  wool  for  cash,  at  18(£  per  lb.  from  consignment 
No.  33. 

Sell  to  Miller  &  Son,  for  cash,  9  crates  eggs,  30  doz.  each,  at  13^  per  doz.  from  consignment 
No.  32;  164  lbs.  chickens  at  15j£  per  lb.  from  consignment  No.  31;  3200  watermelons  at  $25  per  100 
from  consignment  No.  40. 

Remit  to  Ramsburg  &  Co.,  net  proceeds  for  consignment  No.  31,  our  commisson  being  5%. 

Remit  to  Samuel  Hight,  net  proceeds  for  consignment  No.  32,  our  commission  being  5%. 

Remit  to  Thomas  Harrison,  net  proceeds  for  consignment  No.  33,  our  commission  being  5%. 

Remit  to  S.  J.  Radcliffe  &  Son,  net  proceeds  for  consignment  No.  40,  our  commission  being 
5%. 

Pay  for  postage  stamps,  $2. 

Harry  Jones  pays  his  account  in  full. 

Receive  an  Account  Sales  of  the  goods  shipped  Cahall  &  Baynard  (Shipment  No.  1)  showing 
our  net  proceeds  to  be  $418.75.     They  enclose  a  certified  check  for  the  amount. 

18. 

Sell  to  Washburn  Flour  Mills,  for  cash,  4,576  bu.  wheat  at  71£  per  bu.,  from  consignment 
No.  34. 

Sell  J.  Rosenburg,  for  cash,  15  cases  eggs,  30  doz.  each,  at  13^  per  doz.,  from  consignment 
No.  36;  75  bu.  potatoes  at  75^  per  bu.  from  consignment  No.  37;  100  lbs.  butter  at  18f£  per  lb.  from 
consignment  No.  36. 

Sell  to  Albert  Lewis,  for  cash,  20  tons  Timothy  hay  at  $16  per  ton  from  consignment  No.  35. 


206        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Receive  the  following  consignments: 

W.  W.  Wall,  60  tons  Timothy  hay,  20  tons  wheat  straw;  freight  $55.75,  drayage  $10,  insur- 
ance $1.25. 

Baker  &  Co.,  15  tons  mill  feed. 

Remit  to  C.  B.  Crum,  net  proceeds  for  consignment  No.  34,  our  commission  being  5%. 

Remit  to  Chas.  P.  Ridgeway,  net  proceeds  for  consignment  No.  35,  our  commission  being  5%. 

19. 

Receive  consignments  from  the  following  persons: 

W.  A.  McGee,  300  bu.  potatoes,  freight  $8,45,  drayage  $3.75. 

J.  W.  Johnson,  Charleston,  W.  Va.,  1,865  lbs.  wool;  freight  $18.65,  drayage  $2.50. 

Christian  L.  Lampe,  Frederick,  Md.,  164  lbs.  ducks,  336  lbs.  chickens;  freight,  $5.30,  drayage, 
$2.40. 

Maryland  Milling  Co.,  Hagerstown,  Md.,  200  bbls.  flour;  freight  $45.30,  drayage  $10.75,  in- 
surance $1.60. 

Make  the  following  sales: 

W.  T.  Riley,  for  cash,  5  tons  mill  feed  at  $15  per  ton  from  consignment  No.  42. 

Parsons  &  Co.,  for  cash,  from  consignment  No.  36,  10  cases  eggs,  30  doz.  each,  at  12^  per  doz.; 
from  consignment  No.  39,  75  lbs.  butter  at  20^  per  lb. ;  from  consignment  No.  37,  25  bu.  potatoes 
at  75£ 

Remit  to  Frazier  &  Bishop,  net  proceeds  for  consignment  No.  25,  our  commission  being  6%. 

Remit  to  N.  A.  Nicodemus  net  proceeds  for  consignment  No.  26,  our  commission  being  6%. 

Remit  to  A.  Wilson  &  Bro.  net  proceeds  of  consignment  No.  36,  our  commission  being  5% 
of  amount  of  sales. 

Remit  to  Wm.  R.  Gilpin,  Elkton,  Md.,  net  proceeds  of  consignment  No.  37,  our  commission 
being  6%  of  amount  of  sales. 

20. 

Receive  the  following  consignments:    . 

John  S.  Hazard,  Shepherdstown,  W.  Va.,  45  baskets  peaches,  50  bbls.  apples;  freight  $6,  dray- 
age $2.15. 

John  Gassman,  Hagerstown,  Md.,  130  lbs.  butter,  10  cases  eggs;  freight  $3.85,  drayage  $1.25. 

Chas.  H.  Wilson,  Emmittsburg,  Md.,  365  lbs.  chickens;  freight  $1.75,  drayage  45^. 

Frazier  &  Bishop,  Martinsburg,  W.  Va.,  275  bbls.  flour;  freight  $36.75,  drayage  $5.80,  insur- 
ance $1.60. 

Louis  Abel  pays  his  account  in  full. 

Make  the  following  sales: 

Wm.  Andrae,  on  %,  125  bbls.  flour  at  $3.15  per  bbl.  from  consignment  No.  46;  200  bu.  corn 
at  46j£  per  bu.  from  consignment  No.  38;  75  bu.  potatoes  at  75^  per  bu.  from  consignment  No.  43; 
2  tons  mill  feed  at  $15  per  ton  from  consignment  No.  42. 

John  Carver,  for  cash,  from  consignment  No.  46,  75  bbls.  flour  at  $3.15  per  bbl.;  from  consign- 
ment No.  38,  475  bu.  corn  at  46^  per  bu.;  from  consignment  No.  42,  5  tons  mill  feed  at  $15  per  ton. 

Wm.  Ortel,  for  cash,  from  consignment  No.  39,  10  cases  eggs,  30  doz.  each,  at  12^  per  doz. 

Remit  to  George  Bowers  &  Co.,  net  proceeds  of  consignment  No.  38,  our  commission  being  6% 
on  amount  of  sales. 

Remit  to  Samuel  M.  Earp  net  proceeds  of  consignment  No.  39,  our  commission  being  5% 
on  amount  of  sales. 

Remit  to  Maryland  Milling  Co.,  net  proceeds  of  consignment  No.  46,  our  commission  being 
6%  of  amount  of  sales. 

Pay  salaries, 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        207 

22. 
draws  $100  for  private  use. 


(Student's  name) 

Pay  water  rent,  $6.75. 

Pay  for  letter-heads  and  bill-heads,  $10,  for  office  fixtures,  $15.75. 

Pay  Independent  Ice  Co.'s  bill,  $5.75. 

Receive  the  following  consignments: 

F.  C.  Grove,  75  lbs.  butter,  5  cases  eggs;  freight  $2.75,  drayage  45^. 

D.  Seigel  &  Co.,  15  crates  cantaloupes,  100  watermelons;  freight  $2.80  drayage,  60^. 

Make  the  following  sales: 

Davis  Bros.,  for  cash,  from  consignment  No.  41,  25  tons  Timothy  hay  at  $16  per  ton,  10 
tons  straw  at  $6  per  ton;  and  3  tons  mill  feed  at  $15  per  ton  from  consignment  No.  42. 

Harry  Brooke,  for  cash,  50  bu.  potatoes  at  75j£  per  bu.  from  consignment  No.  43;  10  baskets 
peaches  at  $1.50  per  basket,  from  consignment  No.  47;  5  bbls.  apples  at  $1.50  per  bbl.  from  con- 
signment No.  47;  5  crates  cantaloupes  at  $1.25  from  consignment  No.  52. 

George  Brown,  for  cash,  164  lbs.  ducks  at  14c"  per  lb.,  and  336  lbs.  chickens  at  15^  per  lb., 
from  consignment  No.  45. 

Miller  &  Son,  on  %,  25  baskets  peaches  at  $1.50  per  basket  and  20  bbls.  apples  at  $1.50  per 
bbl.  from  consignment  No.  47;  50  lbs.  butter  at  16j£  per  lb.  from  consignment  No.  48. 

M.  Sanders,  for  cash,  10  baskets  peaches  at  $1.50  per  basket  and  25  bbls.  apples  at  $1.50 
per  bbl.  from  consignment  No.  47. 

Frank  Meyer,  for  cash,  80  lbs.  butter,  at  16^  per  lb.,  and  10  cases  eggs  at  12j£  per  doz.  from 
consignment  No.  48. 

Remit  to  Baker  &  Co.,  net  proceeds  for  consignment  No.  42,  our  commission  being  6%. 

Remit  to  Christian  L.  Lampe,  net  proceeds  for  consignment  No.  45,  our  commission  being 
5%. 

Remit  to  John  S.  Hazard  net  proceeds  for  consignment  No.  47,  our  commission  being  6%. 

Remit  to  John  Gassman,  net  proceeds  of  consignment  No.  48,  our  commission  being  5%. 

Receive  from  Wm.  H.  Dill  bank  draft  in  full  of  %. 

Sell  E.  C.  Mann,  for  cash,  25  tons  hay  at~$16  per  ton  from  consignment  No.  41. 

23. 

Receive  the  following  consignments: 

W.  A.  O'Rear,  500  bu.  oats,  1,500  bu.  wheat;  freight  $72,  insurance  $2.25. 

Thos.  F.  Goodwin,  Glyndon,  Md.,  25  crates  cantaloupes,  200  watermelons;  freight  $8.45, 
drayage  $4.25. 

Samuel  Kennedy,  Cherry  Run,  Md.,  267  lbs.  chickens,  20  pairs  pigeons;  expressage  $4.50. 

Sell  to  Samuel  Elder  &  Co.,  for  cash,  10  tons  hay  at  $16  per  ton,  10  tons  straw  at  $6  per  ton 
from  consignment  No.  41;  50  bbls.  flour  at  $3.15  per  bbl.,  from  consignment.  No.  50. 

Sell  to  J.  F.  Norwood,  for  cash,  12  crates  cantaloupes  at  $1.25,  100  watermelons  at  $20  per 
100  from  consignment  No.  54. 

Sell  to  James  Lake,  for  cash,  150  bu.  oats  at  33^  per  bu.  from  consignment  No.  53. 

Sell  to  Katz  Bros.,  on  %,  175  bu.  potatoes  at  75|£  per  bu.,  from  consignment  No.  43. 

Sell  to  Crawford  Woolen  Mill  Co.,  for  cash,  1,865  lbs.  wool  at  17^  per  lb.,  from  consignment 
No.  44. 

Sell  to  Thos.  Carpenter,  for  cash,  13  cases  cantaloupes  at  $1.25  per  crate  and  100  watermelons 
at  $20  per  100  from  consignment  No.  54. 

Sell  to  George  Brown,  for  cash,  10  crates  cantaloupes  at  $1.25  per  crate,  and  100  watermelons 
at  $20  per  100  from  consignment   No.  52. 


208        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Remit  to  W.  W.  Wall  net  proceeds  for  consignment  No.  41,  our  commission  being  6%. 
Remit  to  W.  A.  McGee  net  proceeds  for  consignment  No.  43,  our  commission  being  5%. 
Remit  to  J.  M.  Bronson,  net  proceeds  for  consignment  No.  44,  our  commission  being  6%. 
Remit  to  D.  Seigel  &  Co.,  net  proceeds  for  consignment  No.  52,  our  commission  being  5%. 
Remit  to  Thos.  F.  Goodwin,  net  proceeds  for  consignment  No.  54,  our  commission  being  5%. 

24. 

Receive  the  following  consignments: 

Jones,  Robinson  &  Co.,  500  bu.  potatoes,  12  bbls.  onions;  freight  $18,  drayage  $4.60. 

Turner  &  Son,  50  crates  cabbage,  25  baskets  cucumbers,  10  crates  egg  plants. 

N.  A.  Nicodemus,  225  baskets  peaches. 

Sell  to  Casper  Alt,  for  cash,  365  lbs.  chickens  at  130  per  lb.,  from  consignment  No.  49;  100 
bbls.  flour  at  $3.15  per  bbl.  from  consignment  No.  50. 

Sell  to  J.  F.  Norwood,  for  cash,  75  bbls.  flour  at  $3.15  per  bbl.  from  consignment  No.  50,  75 
lbs.  butter  at  12^  per  lb.  and  5  cases  eggs  at  120  per  doz.  from  consignment  No.  51. 

Sell  to  Parsons  &  Co.,  for  cash,  350  bu.  oats  at  330  per  bu.  from  consignment  No.  53. 

Sell  to  Louis  Abel,  for  cash,  20  prs.  pigeons  at  200  per  pair  and  267  lbs.  chickens  at  130  per  lb. 
from  consignment  No.  55. 

Sell  to  C.  A.  Gambrill  Mfg.  Co.,  on  %,  1,500  bu.  wheat  at  71c"  per  bu.  from  consignment  No.  53. 

Sell  to  George  Roth,  for  cash,  125  baskets  peaches  at  $1.50  per  basket  from  consignment  No. 
58;  25  baskets  cucumbers  at  750  per  basket  from  consignment  No.  57,  10  crates  egg  plants  at  $2 
per  crate  from  consignment  No.  57. 

Receive  from  Samuel  Elder,  $200  on  %. 

25. 

Receive  the  following  consignments: 

L.  J.  Andrews,  265  lbs.  chickens,  125  lbs.  ducks;  freight  $3.45;  drayage  750. 

Wm.  Lea  &  Sons,  125  lbs.  butter,  10  cases  eggs;  freight  $2.75,  drayage  400. 

D.  A.  Robinson,  50  tons  hay,  500  bu.  corn,  40  tons  wheat  straw;  freight  $102.30,  drayage 
$10.75;  insurance  $2.60. 

Sell  to  Henry  Brooks,  for  cash,  25  crates  cabbage  at  600  per  crate  from  consignment  No.  57; 
100  baskets  peaches  at  $1.20  per  basket  from  consignment  No.  58;  100  bu.  potatoes  at  750  per  bu. 
from  consignment  No.  56. 

Sell  to  W.  H.  Dill,  on  %,  125  lbs.  butter  at  140  per  lb.,  10  cases  eggs  at  120  per  doz.  from 
consignment  No.  60. 

Remit  to  Chas.  H.  Wilson,  net  proceeds  consignment  No.  49,  our  commission  being  5%. 

Remit  to  F.  C.  Grove,  net  proceeds  consignment  No.  51,  our  commission  being  5%. 

Remit  to  W.  A.  O'Rear  for  consignment  No.  53,  our  commission  being  6%. 

Remit  to  Samuel  Kennedy  net  proceeds  for  consignment  No.  55,  our  commission  being  5%. 

Remit  to  N.  A.  Nicodemus  net  proceeds  for  consignment  No.  58,  our  commission  being  6%. 

26. 

A.  E.  Trader  draws  $75  for  private  use. 

Receive  the  following  consignments: 

C.  B.  Crum,  2,325  bu.  wheat,  10  tons  mill  feed. 

F.  H.  Baker,  10  cases  eggs  and  125  lbs.  butter. 

Sell  to  J.  Rosenburg,  50  bbls.  flour,  for  cash,  at  $3.15  per  bbl.  from  consignment  No.  50;  125 
lbs.  ducks  at  130  per  lb.  from  consignment  No.  59. 

Sell  to  John  W.  Adams,  for  cash,  20  tons  hay  at  $16  and  200  bu.  corn  at  460  from  consign- 
ment No.  61. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        209 

Sell  to  John  Carver,  for  cash,  10  cases  eggs  at  12^  per  doz.,  and  125  lbs.  butter  at  12^  per  lb. 
from  consignment  No.  63;  265  lbs.  chickens  at  13j£  per  lb.  from  consignment  No.  59. 

Remit  to  Frazier  &  Bishop,  Martinsburg,  W.  Va.,  net  proceeds  for  consignment  No.  50,  our 
commission  being  6%. 

Remit  to  L.  J.  Andrews  net  proceeds  for  consignment  No.  59,  our  commission  being  5%. 

Remit  to  Wm.  Lea  &  Sons,  net  proceeds  for  consignment  No.  60,  our  commission  being  5%. 

Remit  to  F.  H.  Baker,  net  proceeds  for  consignment  No.  63,  our  commission  being  5%. 

27. 

Sell  to  Thos.  Carpenter,  for  cash,  100  bu.  corn  at  46^  per  bu.,  5  tons  wheat  straw  at  $6  per  ton 
from  consignment  No.  61. 

Sell  to  Washburn  Flour  Mill  Co.,  2,325  bu.  wheat  at  70^  per  bu.  from  consignment  No.  62. 
Pay  clerks'  salaries,  $22. 

29. 

Receive  the  following  consignments: 

R.  A.  Long,  15  crates  cantaloupes,  25  baskets  tomatoes. 

Maloney  &  Carter,  300  watermelons,  30  baskets  cucumbers. 

Wm.  R.  Gilpin,  25  crates  eggs,  230  lbs.  butter. 

Sell  to  Chas.  H.  Brown,  for  cash,  200  bu.  potatoes  at  70^  per  bu.  from  consignment  No.  56; 
10  crates  cantaloupes  at  SI  .20  from  consignment  No.  64;  10  baskets. tomatoes  at  90c1  from  consign- 
ment No.  64. 

Sell  to  John  Carter,  for  cash,  200  bu.  potatoes  at  70c1  and  12  bbls.  onions  at  85^  from  consign- 
ment No.  56. 

Sell  to  Wm.  Andrae,  on  %,  100  watermelons  at  $20  per  100  from  consignment  No.  65;  5  crates 
cantaloupes  at  $1.20  each  from  consignment  No.  64. 

Sell  to  Miller  &  Son,  on  %,  15  baskets  tomatoes  at  90^  from  consignment  No.  64. 

Remit  to  R.  A.  Long,  net  proceeds  for  consignment  No.  64,  our  commission  being  5%. 

30. 

Receive  the  following  consignments: 

George  Bowers  &  Co.,  200  bbls.  flour;  pay  freight  $30.85,  drayage  $5.60,  insurance  $1.25. 

J.  G.  Haldermann,  200  lbs.  butter,  25  cases  eggs. 

Sell  to  W.  T.  Riley,  for  cash,  10  tons  mill  feed  at  $15  per  ton  from  consignment  No.  62;  10 
tons  hay  at  $16  from  consignment  No.  61;  8  tons  straw  at  $6  from  consignment  No.  61. 

Sell  to  Henry  Brooke,  for  cash,  12  crates  eggs  at  12^  per  doz.  and  50  lbs.  butter  at  16^  per  lb. 
from  consignment  No.  66. 

Remit  to  C.  B.  Crum  net  proceeds  for  consignment  No.  62,  our  commission  being  6%. 

Receive  from  Albert  Lewis,  $150  on  %. 

31. 

Sell  to  Wm.  Ortel,  for  cash,  30  baskets  cucumbers  at  70^  from  consignment  No.  65;  13  crates 
eggs  at  12c7  per  doz.,  from  consignment  No.  66;  25  bbls.  flour  at  $3.15  from  consignment  No.  67. 

Sell  to  Thos.  Goodwin,  for  cash,  75  lbs.  butter  at  16^  and  10  cases  eggs  at  12^  per  doz.  from 
consignment  No.  68. 

Receive  from  Wm.  Andrae,  check  for  $300  to  apply  on  %. 

In  closing  the  books,  the  student  must  remember  that  the  goods  on  hand  do  not  belong  to 
the  firm.  The  inventory  on  commission  will  consist  of  5%  of  all  sales  made  for  which  no  Account 
Sales  have  been  rendered.  Allow  5%  on  store  and  office  fixtures  for  depreciation.  Books  and 
stationery  on  hand,  $25. 


210         MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

WRITTEN  TEST  NO.  18. 

1.  Why  are  goods  shipped  to  be  sold  on  commission  not  entered  in  the  Sales  Book? 

2.  What  is  a  shipment?  To  whom  sent?  When  are  shipment  accounts  debited?  Credited? 
Are  shipment  accounts  closed  into  Loss  &  Gain  account? 

3.  What  is  an  Account  Sales;  net  proceeds;  agent's  and  principal's  accounts?  What  is  a 
factor? 

4.  Explain  commission  business,  merchant,  consignor,  consignee,  consignment,  broker, 
trustee. 

5.  What  is  a  consignment?    Who  sends  it?    Why?     Who  receives  it?     What  is  he  called? 

6.  Who  is  the  owner  of  the  consigned  goods  after  they  reach  the  consignee?     Why? 

7.  When  is  the  account  opened  with  a  consignment  debited?     Credited?     How  closed? 

8.  Why  is  no  Journal  entry  made  when  goods  are  received?    Where  is  the  record  made? 

9.  When  and  by  whom  is  the  Account  Sales  made,  consignor,  or  consignee?  What  does  it 
contain? 

10.  When  advances  are  made  on  account  of  a  consignment,  how  is  it  done  and  what  are  the 
entries  on  each  person's  books? 

11.  Can  consignment  and  shipment  accounts  be  handled  the  same  as  personal  accounts? 
In  the  same  Ledger? 

12.  Why  is  it  necessary  to  give  more  space  than  that  afforded  in  a  regular  Ledger  account 
in  some  cases  to  consignment  accounts? 

13.  Why  is  it  necessary  in  some  cases  to  enter  in  the  Account  Sales  and  also  in  the  consign- 
ment account  the  names  of  the  persons  to  whom  the  goods  are  sold;  also  those  of  the  persons 
to  whom  we  pay  any  of  the  charges  debited  to  the  consignment? 

14.  Is  the  Index  a  part  of  the  Ledger  or  may  it  be  separate? 

15.  What  is  gained  by  indexing  your  Ledger? 

16.  What  is  a  Vowel  Index? 

17.  Could  you  keep  the  Index  on  cards? 

18.  In  the  Ledger  of  a  small  business  you  will  soon  memorize  the  pages  of  the  accounts. 
Could  you  do  this,  if  you  had  a  ledger  holding,  say,  1500  accounts? 

19.  What  is  a  Letter  Impression  Book.     Explain  its  uses. 

20.  What  is  a  Commercial  Agency's  Book.  Explain  its  uses.  What  is  a  Commercial  Agency? 
What  do  you  mean  by  one's  rating? 

21.  Why  did  you  keep  the  controlling  account,  called  Customers?  Could  you  have  taken 
a  Trial  Balance  of  the  General  Ledger  without  it's  being  included? 

22.  Why  do  you  handle  special  columns  in  your  books  of  original  entry? 

23.  Why  are  you  so  careful  about  making  an  entry  in  your  books  before  sending  out  a  bill 
or  paying  cash? 

24.  Why  do  you  send  out  statements  to  your  customers,  as  soon  as  you  have  taken  a  Trial 
balance? 

25.  Why  do  you  not  send  statements  to  creditors? 

26.  You  have  three  columns  on  your  Customers'  Ledger  cards.  How  did  you  use  the  balance 
column? 

CORPORATION  BOOKKEEPING 

/  236.     The  books  of  a  corporation  in  most  respects  are  kept  just  the  same  as  the  books  for  the 

/  same  business  would  be  kept  if  the  business  were  owned  by  an  individual  or  a  partnership.     The 

chief  point  of  difference  is  that  instead  of  a  stock  account  for  an  individual  owner,  or  separate  stock 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.  211 

accounts  for  each  of  two  or  more  partners,  an  account  called  "Capital  Stock"  is  kept  to  show  the 
amount  of  capital  invested  in  the  business  and  various  other  accounts  are  kept  which  are  not  found 
in  the  books  of  a  business  belonging  to  an  individual  owner  or  a  partnership,  such  as  Unissued 
Stock  account,  Subscription  account,  Treasury  Stock,  Surplus,  Undivided  Profits,  and  Dividend 
accounts. 

CAPITAL  STOCK  ACCOUNT.     UNISSUED  STOCK  ACCOUNT.      SUBSCRIBED  STOCK  ACCOUNT. 

237.  In  opening  books  for  a  new  corporation,  the  capital  of  which  has  all  been  subscribed  and 
paid  for  at  par,  the  appropriate  entry  will  be— 

Cash,  Dr.        For  the  par  value  of  the  stock  sold. 
Capital  Stock,  Cr. 
The  Capital  Stock  account  will  show  a  credit  for  the  amount  of  the  capital  stock  sold  and  the 
Cash  account  will  show  a  debit  for  the  amount  paid  in. 

238.  If  the  authorized  capital  stock  has  not  all  been  sold  and  paid  for  when  the  books  are 
opened,  the  entries  may  be  made  as  above  directed,  covering  only  what  stock  has  been  subscribed 
and  paid  for  in  full,  thus  having  the  Capital  Stock  account  show  only  the  amount  of  stock  that 
has  been  subscribed  and  paid  for,  or  instead  of  this,  the  Capital  Stock  account  may  be  credited 
with  the  entire  amount  of  the  authorized  capital  stock  and  this  credit  be  balanced  by  debits  to 
two  accounts,  a  debit  to  the  Cash  account  for  the  amount  of  stock  subscribed  and  paid  for  in  full 
and  a  debit  to  Unissued  Stock  account  for  the  remainder  of  the  capital  stock.  In  this  case  the 
proper  entries  will  be, — 

Cash,  Dr.         For  the  amount  of  stock  subscribed  and  paid  for  in  full. 

Capital  Stock,  Cr. 
Unissued  Stock,  Dr.        For  the  amount  of  stock  unsold  or  not  paid  for  in  full. 
Capital  Stock,  Cr. 
Then  the  Capital  Stock  account  will  show  a  credit  for  the  entire  amount  of  authorized  capital 
stock;  the  Cash  account  will  show  a  debit  for  the  amount  of  cash  paid  in  and  the  Unissued  Stock 
Account  will  show  a  debit  for  the  amount  of  unsold  capital  stock.     In  the  event  of  no  stock  being 
issued,  the  Capital  Stock  account  will  be  credited  and  the  Unissued  Stock  account  debited  for 
the  entire  amount  of  authorized  Capital  Stock.     However,  it  is  probably  the  more  common  prac- 
tice to  follow  the  first  plan  and  have  the  Capital  Stock  account  show  a  credit  of  only  the  capital 
stock  that  has  been  sold  and  paid  for  and  then  whenever  more  of  the  stock  is  issued,  Capital  Stock 
is  credited  for  the  amount  and  a  corresponding  debit  is  made  to  the  appropriate  account. 

239.  If  at  anytime  the  capital  stock  of  the  corporation  is  increased,  the  entries  for  the  increase 
are  similar  to  the  entries   for  the  capital  stock  originally  issued. 

240.  If  at  the  time  of  the  organization  of  the  corporation  or  when  later  sales  of  stock  are  made, 
the  subscribers  are  to  pay  for  their  stock  in  installments  as  is  frequently  the  case,  and  the  Capital 
Stock  account  is  to  show  only  the  amount  of  stock  actually  issued,  the  entries  will  run  as  follows-*. — 

Subscribers,  Dr.        For  the  par  value  of  the  stock  subscribed. 
Subscribed  Stock  Account,  Cr. 
and  when  any  installment  on  the  stock  is  paid  either  at  the  time  of  making  the  subscription  or 
at  any  later  date,- 

Cash,  Dr.        For  the  amount  of  the  payment  made. 
Subscribers,  Cr. 
and  when  full  payment  has  been  made  by  any  subscriber  for  the  stock  subscribed,  the  stock  is 
issued  to  him  and  the  entry  made — 

Subscribed  Stock  Account,  Dr.        For  the  par  value  of  the  stock  issued. 
Capital  Stock  account,  Cr. 


212        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

241.  Very  frequently  the  capital  stock  of  a  new  corporation  is  sold  at  the  beginning  below 
par.     In  such  a  case,  if  the  sale  is  made  for  cash,  the  entries  will  be, — 

Cash,  Dr.        For  the  amount  of  cash  realized  from  the  sale. 

Discount  on  Stock  Sold,  Dr.        For  the  difference  between  the  amount  received  and 

the  par  value  of  the  stock. 
Capital  Stock,  Cr.        For  the  par  value  of  the  stock  sold. 
If  a  sale  of  stock  at  a  discount  is  made  on  the  installment  plan,  the  entries  will  be, — 
Subscribers,  Dr.         For  the  amount  that  is  to  be  paid  for  the  stock. 
Discount  on  Stock  Sold,  Dr.        For  the  difference  between  the  amount  that  is  to  be 

paid  for  the  stock  and  its  par  value. 
Subscribed  Stock  account,  Cr.        For  the  par  value  of  the  stock  sold. 
Then  as  the  installments  are  paid, — 

Cash,  Dr.        For  the  amount  paid. 
Subscribers,  Cr. 
and  when  all  of  the  installments  have  been  paid  and  the  stock  is  issued, — 

Subscribed  Stock  Account,  Dr.,        For  the  par  value  of  the  stock  issued. 
Capital  Stock,  Cr. 

242.  Sometimes  instead  of  the  stock  of  a  new  corporation  being  sold  at  a  discount,  one  or 
more  shares  of  stock  will  be  given  free  with  a  certain  number  of  shares  purchased.  In  such  a  case 
the  entries  are  just  the  same  as  in  the  preceding  example,  except  that  an  account  called  "Bonus 
Stock"  is  debited  in  place  of  the  account  Discount  on  Stock  Sold. 

243.  Frequently  the  stock  of  a  corporation  is  divided  into  two  classes,  called  Preferred  Stock 
and  Common  Stock.  In  such  a  case,  instead  of  Capital  Stock  account,  two  accounts  are  kept, 
a  Preferred  Stock  account  and  a  Common  Stock  account  and  the  total  of  these  two  accounts  con- 
stitutes the  capital  stock  of  the  corporation. 

244.  Sometimes  a  corporation  will  accept  in  payment  for  stock,  property  other  than  cash, 
such  as  equipment  which  will  be  of  value  to  the  corporation.     Suppose,  for  instance,  that  a  cor- 
poration is  to  be  formed  to  conduct  a  general  hauling  business  and  one  of  the  men  forming  the 
corporation  owns  eight  two-ton  automobile  trucks  which  the  incorporators  agree  will  be  accepted 
in  payment  for  $10,000  worth  of  the  stock  of  the  corporation.     In  this  case  the  entry  will  be, — 

Automobile  Trucks,  Dr.  $10,000 

Capital  Stock,  Cr.  $10,000 

245.  Frequently  when  a  corporation  is  formed,  it  takes  over  a  business  already  in  operation 
and  stock  of  the  new  corporation  is  issued  to  the  owner  or  owners  of  the  business  taken  over  in 
payment  for  the  property  and  the  interests  thus  taken  over.  The  things  taken  over  and  paid  for 
in  stock  may  include  real  estate,  merchandise  or  manufactured  goods  on  hand,  accounts  and  notes 
receivable,  machinery,  patents,  trade  secrets,  good  will  or  property  of  any  other  kind.  If  the 
owners  of  the  business  that  is  to  be  taken  over  are  the  incorporators  of  the  new  corporation  and 
wish  to  continue  the  set  of  books  they  have  been  keeping  and  wish  to  issue  capital  stock  for  only 
the  amount  that  their  present  books  show  as  at  that  time  invested  in  the  business,  all  that  it  is 
necessary  to  do  is  to  close  the  books  and  then  to  debit  the  stock  account  of  each  member  of  the 
firm  for  the  amount  of  his  present  worth  and  credit  the  Capital  Stock  account  for  the  same  amount. 
If  under  the  same  conditions  the  corporation  desires  to  open  a  new  set  of  books,  all  that  it  is  neces- 
sary to  do  after  making  the  above  entries  is  to  transfer  all  debit  and  all  credit  balances  from  the 
old  books  to  the  new  books. 

246.  If,  on  the  other  hand,  it  is  desired  to  issue  to  the  persons  from  whom  the  business  is 
taken  over,  stock  for  an  amount  exceeding  their  combined  present  worth,  then  in  that  case,  some 
account  such  as  Good-will,  or  Cost  of  Property,  must  be  opened  and  debited  for  the  difference 
between  the  total  of  the  present  worth  of  the  partners  and  the  total  of  the  par  value  of  the  stock 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        213 

that  is  to  be  issued  to  them.  For  instance,  if  A,  B,  C,  D  and  E  are  in  business  together  and  each 
has  a  net  investment  of  $15,000  and  they  decide  to  incorporate  for  $100,000  and  to  issue  all  of 
the  stock  to  themselves,  the  entries  will  be, — 

A,  Dr $15,000 

B,  Dr 15,000 

C,  Dr 15,000 

D,  Dr 15,000 

E,  Dr 15,000 

Good-will,  Dr 25,000 

Capital  Stock,  Gr $100,000. 

If  instead  of  issuing  the  entire  amount  of  the  capital  stock  to  the  five  partners,  part  of  it  is  sub- 
scribed for  by  other  persons,  the  entries  for  any  such  subscriptions  will  be  in  accordance  with  the 
directions  hereinbefore  given. 

247.  When  an  account  such  as  Good-will  or  Patents  or  Copy-rights  is  opened,  it  is  customary 
to  charge  off  part  of  the  account  to  Loss  and  Gain  each  year  until  the  account  is  entirely  wiped  out. 

248.  The  conditions  under  which  corporations  are  organized  and  their  stock  issued,  is  so  varied 
it  would  be  impossible  to  illustrate  opening  entries  to  meet  all  conditions,  but  the  under-lying 
principles  are  always  in  accordance  with  the  forms  herein  given. 

249.  Most  corporations  representing  investments  of  any  considerable  size  employ  expert 
accountants  or  Certified  Public  Accountants  to  open  their  books  and  also  to  audit  their  books 
periodically. 

TREASURY  STOCK  ACCOUNT. 

250.  The  Treasury  Stock  account  is  an  account  kept  for  shares  of  stock  that  have  been  issued 
that  are  bought  back  by  the  corporation  and  shares  that  are  returned  to  the  Treasury  of  the  cor- 
poration by  their  owners  so  that  they  may  be  resold  in  order  to  raise  working  capital  or  funds 
to  meet  some  emergency.  If  stock  is  bought  back  by  the  corporation  for  cash,  cash  should,  of 
course,  be  credited  and  Treasury  Stock  account  should  be  debited  for  the  amount  paid.  If  stock 
is  received  through  gift  or  donation  Treasury  Stock  should  be  debited  and  a  Donated  Stock  ac- 
count should  be  credited  for  the  market  value  of  the  stock  received.  If  any  of  the  Treasury  Stock 
is  sold,  the  Treasury  Stock  account  should  be  credited  with  the  same  amount  with  which  this  account 
was  debited  when  the  stock  was  secured,  and  if  more  is  received  for  the  stock  than  was  charged 
to  the  Treasury  Stock  account  at  the  time  the  stock  was  acquired,  the  Surplus  account  should  be 
credited  with  the  excess.  On  the  other  hand,  if  less  is  received  for  the  stock  than  was  charged  to 
the  Treasury  Stock  account  at  the  time  the  stock  was  acquired,  the  Surplus  account  should  be 
debited  with  the  difference  between  what  is  received  and  what  was  originally  charged.  When 
all  of  the  Treasury  Stock  has  been  disposed  of,  the  Treasury  Stock  account  will  balance.  When 
the  account  is  not  in  balance,  the  amount  that  the  debit  side  of  the  account  exceeds  the  credit 
side,  represents  the  cost  or  the  market  value  of  the  Treasury  Stock  on  hand  and  this  is  a  resource. 

251.  Treasury  Stock  does  not  receive  dividends. 

252.  When  the  Donated  Stock  that  has  been  received  has  been  disposed  of,  the  Donated 
Stock  account  is  closed  into  the  Surplus  account  by  debiting  Donated  Stock  and  crediting  Surplus 
for  the  amount  shown  in  the  Donated  Stock  account. 

253.  If  at  any  time  Treasury  Stock  is  canceled  and  thus  wiped  out  of  existence,  the  capital 
stock  account  must  be  debited  for  the  par  value  of  the  stock  canceled.  This  debit  is  balanced  by 
a  credit  to  the  Treasury  Stock  account  if  the  Treasury  Stock  has  been  entered  in  this  account  at 
par.     If  the  stock  when  acquired  was  entered  in  the  Treasury  Stock  account  at  less  than    par 


214        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

and  for  that  reason  the  credit  to  the  Treasury  Stock  account  on  the  cancellation  of  the  stock  does 
not  equal  the  debit  to  the  capital  stock  account,  the  Surplus  account  must  be  credited  with 
the  difference.  On  the  other  hand,  if  the  Treasury  Stock  account,  because  of  the  market  value 
of  the  stock  at  the  time  it  was  acquired,  was  at  that  time  debited  with  more  than  the  par  value 
of  the  stock,  at  the  time  of  the  cancelation  of  the  stock  the  Surplus  account  would  have  to  be 
debited  with  the  difference  between  the  par  value  of  the  stock  and  its  book  value  as  shown  in  the 
Treasury  Stock  account. 

254.  Some  corporations  use  the  name  Treasury  Stock  instead  of  the  more  accurate  title  Un- 
ssued  Stock  for  the  part  of  their  authorized  capital  stock  that  has  not  been  issued  and  accord- 
ingly keep  the  Unissued  Stock  account  under  the  title  of  Treasury  Stock  account. 

UNDIVIDED  PROFITS  ACCOUNT.    DIVIDEND  ACCOUNT.     SURPLUS  ACCOUNT. 

255.  In  closing  the  books,  instead  of  carrying  the  gain  from  the  Loss  and  Gain  account  to 
the  Capital  Stock  account,  an  Undivided  Profits  account  is  opened,  which  account  is  credited 
with  the  amount  of  the  net  gain.  If  there  is  a  loss,  the  Undivided  Profits  account  is  debited  with 
the  amount  of  the  net  loss. 

256.  A  part  of  the  gain  is  usually  distributed  among  the  stockholders  as  dividends.  If  this 
is  to  be  done,  a  Dividend  account  is  opened  and  the  Undivided  Profits  account  is  debited  and  the 
Dividend  account  credited  for  the  amount  to  be  paid  out  in  dividends.  When  payment  of  divi- 
dends is  made  to  the  stockholders  the  Dividend  account  is  debited  and  the  Cash  account  credited. 
The  Dividend  account  should  balance  after  all  dividends  have  been  paid  to  shareholders. 

257.  A  portion  (the  size  of  which  is  determined  by  the  Board  of  Directors)  of  the  balance 
remaining  to  the  credit  of  the  Undivided  Profits  account,  is  usually  carried  to  a  Surplus  account 
by  charging  the  Undivided  Profits  account  and  crediting  Surplus  account  with  the  amount. 
Should  the  trade  of  any  year  show  a  net  loss,  a  sufficient  portion  of  the  Surplus  may  be  transferred 
back  to  the  Undivided  Profits  account  to  pay  the  regular  dividend.  The  Journal  entry  in  this 
case  would  be  to  charge  Surplus  account  and  credit  Undivided  Profits  account.  Should  the  Sur- 
plus, because  of  continued  misfortune,  be  exhausted,  the  Surplus  account  of  course  can  no  longer 
be  charged.  If  it  is  still  desired  to  pay  dividends,  perhaps  in  anticipation  of  unusual  profits  in 
the  near  future,  an  account  called  Deficiency  may  be  charged  and  Undivided  Profits  credited  with 
a  sufficient  figure  to  pay  the  desired  dividend.  The  Deficiency  account  is  put  on  the  left  hand 
side  of  the  balance  sheet  just  below  the  Deferred  Assets. 

258.  Corporations  do  not  usually  declare  dividends,  or  reserve  Surplus  profits  equal  in  the 
aggregate  to  the  entire  gain;  consequently,  the  Undivided  Profits  account  will  show  a  balance  on 
the  credit  side. 

259.  It  is  a  common  practice  for  large  corporations  to  reserve  sufficient  profits  each  year  from 
division  among  shareholders  to  pile  up  a  large  surplus,  which  shows  in  the  credit  balance  of  the 
Surplus  account.     The  surplus  amounts  to  several  millions  of  dollars  in  many  instances. 

RECORD  BOOKS. 

260.  In  addition  to  the  books  of  account,  each  corporation  has  certain  record  books  which 
are  usually  kept  by  or  under  the  direction  of  the  secretary  of  the  corporation.  Some  of  the  more 
important  books  of  this  class  are  as  follows: 

261.  The  Minute  Book.  In  the  Minute  Book  is  kept  a  copy  of  the  by-laws  of  the  corporation 
and  a  complete  record  of  all  meetings  of  the  stockholders  and  of  the  Board  of  Directors.  It  is 
essential  that  every  action  taken  or  authorized  by  the  stockholders  or  by  the  Board  of  Directors 
be  recorded  in  this  book. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.       215 

262.  The  Stock  Certificate  Book.  The  Stock  Certificate  Book  is  a  book  containing  printed  or 
engraved  certificates  of  stock  along  with  stubs  for  record  purposes.  These  certificates  contain 
the  name  of  the  corporation,  a  statement  of  the  authorized  capital  stock,  the  number  of  shares 
into  which  the  capital  stock  is  divided,  the  par  value  of  each  share  and  blank  spaces  for  filling  in 
the  date  on  which  the  certificate  is  issued,  the  number  of  shares  for  which  it  is  issued,  to  whom 
it  is  issued  and  the  signature  of  the  officers  of  the  corporation  issuing  the  stock, — usually  the  Presi- 
dent and  the  Secretary  of  the  corporation.  The  stubs  contain  printed  forms  to  be  filled  in,  show- 
ing on  what  date  each  certificate  is  issued,  for  how  many  shares,  to  whom  and  from  whom  the 
stock  is  transferred  and  the  number  of  the  stock  certificate  that  is  superceded  if  the  new  certifi- 
cate represents  the  transferring  of  stock  from  one  holder  to  another  or  the  surrender  of  a  certificate 
in  place  of  the  new  certificate  issued.  When  stock  certificates  are  surrendered  as  in  the  case  of 
the  transfer  of  stock  from  one  owner  to  another,  it  is  a  common  custom  to  file  the  canceled  certifi- 
cate in  the  stock  certificate  book  by  pasting  it  to  its  original  stub. 

263.  The  Stock  Transfer  Journal.  The  Stock  Transfer  Journal  is  a  book  in  which  a  record 
of  all  transfers  of  stock  is  kept.  It  furnishes  a  record  of  all  transfers  in  concise  and  chronological 
order.     The  entries  from  the  Stock  Transfer  Journal  are  posted  to  the  Stock  Ledger. 

264.  The  Stock  Ledger.  The  Stock  Ledger  shows  how  many  shares  of  the  stock  in  the  cor- 
poration are  owned  by  each  stockholder  and  when  each  stockholder  acquired  the  stock  and  when 
he  parted  with  it.  If,  when  the  stock  is  originally  issued  an  account  called  Capital  Stock  Issued 
is  opened  in  the  Stock  Ledger  and  as  stock  is  issued  each  stockholder  is  credited  with  the  number 
of  shares  and  the  par  value  of  the  stock  issued  to  him  and  the  Capital  Stock  Issued  account  is 
debited  for  the  same  number  of  shares  and  their  par  value,  the  record  being  made  either  direct 
from  the  Stock  Certificate  book  or  through  the  Stock  Transfer  Journal,  and  then  whenever  a  stock- 
holder transfers  any  of  his  stock,  the  entry  in  the  Stock  Transfer  Journal  is  properly  posted,  debit- 
ing him  and  crediting  the  new  owner  with  the  stock  so  transferred,  the  Stock  Ledger  will  always 
show  in  its  Capital  Stock  Issued  account,  the  amount  of  outstanding  Capital  Stock  and  in  the 
accounts  of  the  individual  stockholders  the  number  of  shares  and  the  par  value  of  the  stock  owned 
by  each  stockholder. 

265.  The  Dividend  Book.  The  Dividend  Book  is  a  book  in  which  a  record  is  kept  of  divi- 
dends declared,  the  name  of  each  stockholder  and  the  dates  of  the  payments  of  the  various  divi- 
dends to  each  of  the  stockholders. 

THE  VOUCHER  SYSTEM. 

266.  In  the  voucher  system,  an  account  called  Vouchers  Payable  takes  the  place  of  the  con- 
trolling account,  "Accounts  Payable"  in  the  General  Ledger.  In  the  handling  of  items  for  this 
system,  two  books  are  usually  kept,  the  Voucher  Book  and  the  Vouchers  Payable  Register.  (See 
forms  on  pages  216  and  218.) 

267.  The  Voucher  Book,  consists  of  what  are  practically  Bill-head  and  check  forms  bound 
together,  so  as  to  be  detachable  from  a  printed  stub.  When  a  purchase  is  made,  a  form  with  its 
attached  stub  is  made  out.  Unless  a  transaction  is  very  complicated,  the  form  mentioned  shows 
all  the  details.  When  the  transaction  is  very  complicated,  the  invoice  received  can  be  numbered, 
and  filed  numerically,  the  number  being  entered  on  the  form  instead  of  all  the  items.  The  stub 
summarizes  the  transaction  with  the  additional  statement  of  how  the  items  are  to  be  treated,  or 
names  the  accounts  to  be  charged,  in  the  books  of  the  paying  firm.  For  instance,  suppose  a  de- 
partment store  is  billed  for  advertising.  Upon  the  arrival  of  the  bill  from  the  newspaper,  the 
voucher  form  is  filled  out  in  detail,  the  voucher  stub  being  also  filled  out  with  summarized  infor- 
mation, along  with  the  additional  statement  of  how  the  charge  for  advertising  is  to  be  divided  among 
the  different  departments  of  the  store.     When  the  amount  becomes  due,  the  voucher  check  is 


216         MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        217 

mailed  in  payment.  The  presence  of  a  voucher,  undetached,  in  the  Voucher  Book  shows  that 
the  bill  summarized  on  it  has  not  been  paid,  for  the  voucher-checks  are  torn  from  the  stubs  as 
rapidly  as  they  are  due  and  are  sent  to  the  creditor,  so  you  see  the  book  corresponds  with  the  con- 
trolling account,  "Vouchers  Payable"  account,  when  you  take  it  as  a  whole.  The  sum  of  the 
amounts  on  the  undetached  vouchers  in  the  Voucher  Book  equals  the  balance  of  the  "Vouchers 
Payable"  account  in  the  General  Ledger.  Consult  the  accompanying  forms.  When  the  Voucher 
System  was  first  introduced  the  vouchers  did  not  contain  check  forms  but  now  with  most  busi- 
nesses using  the  voucher  system,  the  vouchers  take  the  place  of  the  common  form  of  bank  check, 
the  voucher  containing  a  clause  ordering  a  bank  to  pay  the  amount  of  the  bill  just  like  an  ordi- 
nary check  does.  (See  form  of  Voucher  Book  page  216.)  This  is  convenient  for  the  counting  room, 
for  a  receipt  in  the  form  of  a  check  indorsement  is  then  on  the  voucher's  back,  and  no  dispute  as  to 
the  particular  items  covered  by  the  payment  can  possibly  arise.  Another  advantage  to  business 
men  is  that  the  voucher  combined  with  the  check  makes  the  voucher  system  much  more  easy  to 
keep  up  as  all  of  the  vouchers  must  come  back  being  checks  which  are,  of  course,  passed  through 
the  bank  and  eventually  back  to  the  house  issuing  them.  We  will  use  this  form  in  our  work  in 
the  following  set. 

268.  The  Voucher  Register  (See  form  given  herewith)  is  written  directly  from  the  Voucher 
Book  showing  details  and  divisions  of  expenditure,  allotting  the  correct  part  of  each  payment  to 
the  account  to  which  it  belongs.  At  the  end  of  each  month  the  total  of  the  column  headed, 
"Amount,"  is  posted  to  the  credit  of  Vouchers  Payable  in  the  General  Ledger  and  the  amounts 
of  the  several  separate  departmental  totals  are  debited  to  the  proper  accounts  in  the  General 
Ledger.  The  books  are  in  this  way  kept  in  balance  just  as  they  would  be  if  the  posting  were  done 
from  the  Invoice  Book  or  from  the  Journal.  The  Voucher  Register,  however,  permits  of  a  more 
extensive  subdivision  of  the  charges  to  different  business  accounts  than  is  permitted  by  the  Invoice 
Book  or  ordinary  Columnar  Journal.  A  few  items  for  which  no  special  columns  are  provided,  will 
need  to  be  posted  individually.  Columns  are  provided  only  for  those  special  heads  under  which 
frequent  purchases  are  made.  If  only  one  or  two  purchases  are  made  daring  the  month,  it  would 
be  folly  to  maintain  a  special  column  for  that  head.  For  these  infrequent  purchases  a  miscel- 
laneous column  is  provided  in  the  Voucher  Register,  headed  "Miscellaneous  Accounts  to  be 
Charged." 

269.  When  payments  are  made,  Vouchers  Payable  account  is  charged  through  the  Cash  Book. 
The  credit  balance  of  the  account  in  the  General  Ledger,  therefore,  should  always  agree,  not  only 
with  the  sum  of  the  amounts  on  undetached  vouchers  in  the  Voucher  Book,  but  with  the  sum  of 
the  unpaid  items  in  the  Voucher  Register. 

SET  10. 

JAN.  1,  19—,  (TUESDAY). 

A  corporation  is  organized  Jan.  1,  19 — ,  with  a  capital  of  $200,000.  This  corporation  is  to 
be  known  as  the  Baltimore  Cotton  Duck  Co.  and  has  been  organized  for  the  purpose  of  manu- 
facturing cotton  duck.  Seventy-five  per  cent,  of  the  stock  has  been  subscribed  by  the  following 
persons:  J.  L.  Housel,  $25,000;  Henry  A.  Stewart,  $20,000;  J.  S.  Waream,  $18,000;  Jas.  F.  Clark, 
$12,000;  John  Craig,  $10,000;  R.  P.  Poltz,  $10,000;  Addision  G.  Mitchell,  $10,000;  P.  J.  Morgan, 
$8,000;  Walter  L.  Sherman,  $8,000;  E.  L.  Burriss,  $6,000;  F.  L.  Cross,  $5,000;  W.  A.  Gallup, 
$18,000. 

Twenty-five  per  cent,  of  each  of  the  above  subscriptions  has  been  paid  in  cash.  The  remain- 
der is  to  be  paid  in  three  equal  installments  in  one,  two,  and  three  months  respectively. 


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MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        219 

3. 

Buy  of  Telfair  W.  Marriott,  a  building  in  Woodbury  for  $10,000  giving  him  a  check  for 
$3,000,  a  first  mortgage  upon  the  property  for  $5,500  to  run  three  years,  and  our  note  at  sixty 
days  for  the  remainder.     Interest  upon  the  mortgage  and  the  note  is  to  be  at  6%. 

270.  In  a  manufacturing  business,  we  do  not  keep  a  Merchandise  account,  but  in  place  of  it 
we  open  the  following  group  accounts:  Income  from  Operations,  Cost  of  Goods  Sold  (Turnover), 
Selling  Expense,  Administrative  Charges,  Income  from  Other  Sources,  Profit  and  Loss  Charges, 
and  Inventory  Account. 

271.  Separate  accounts  are  opened  for  each  article  used  in  manufacturing,  and  the  cost  of 
conducting  the  business  is  ordinarily  shown  under  the  headings  of  these  accounts. 

In  this  set  besides  the  necessary  corporation  accounts  and  the  group  accounts  named  above, 
we  will  use  the  following  accounts : — Real  Estate,  Mortgage  Receivable,  Mortgage  Payable,  Bills 
Receivable,  Bills  Payable,  Office  Furniture  and  Fixtures,  Machinery,  Mill  Fixtures,  Tools,  Teams 
and  Auto  Trucks,  Stable  and  Garage  Expenses,  Repairs  and  Renewals — Machinery,  Repairs  and 
Renewals — Other  than  Machinery,  Heat,  Light,  and  Power,  Insurance,  Advertising,  Postage, 
Freight  Inward,  Freight  Outward,  General  Expense,  Oil  Purchases,  Cotton  Purchases,  Paper 
Purchases,  Cash  Discount  on  Purchases,  Wages,  Salaries,  Manufactured  Goods  Sold,  Waste  Goods 
Sold,  Cash  Discount  on  Sales,  Reserve  for  Bad  and  Doubtful  Accounts,  Reserve  for  Depreciation 
on  Machinery,  Reserve  for  Depreciation  on  Mill  Fixtures,  Reserve  for  Other  Depreciation. 

272.  Arrange  those  accounts  of  the  above  list  which  will  appear  upon  the  Balance  Sheet  in 
one  group  and  those  which  will  appear  upon  the  Income  and  Profit  and  Loss  Statement  in  a  sec- 
ond division,  each  following  directly  after  the  group  account  to  which  it  belongs  and  into  which 
it  will  be  closed  at  closing  time.  (See  form  of  Statement  of  Income  and  Profit  and  Loss, 
and  form  of  Balance  Sheet.) 

If  accounts  are  arranged  in  the  proper  order  or  sequence,  the  making  of  financial  statements 
at  any  time  is,  comparatively  speaking,  an  easy  matter. 

Freight  and  Express,  Office  Furniture  and  Fixtures,  Insurance,  Oil,  Fuel,  Interest  and  Dis- 
count, Discount  on  Finished  Goods,  Discount  on  Cotton,  Lost  Accounts  and  Notes,  Teams  Ex- 
pense, Discount  on  Paper,  Discount  on  Mill  Fixtures,  Discount  on  Oil,  Tools,  New  Parts  and 
Repairs. 

272.  In  closing  the  books,  discount  on  cotton  is  closed  into  the  Cotton  account,  after  which 
Cotton  account,  Wages,  Waste,  Paper,  Oil,  Fuel,  Freight  and  Express,  Insurance,  and  Discount 
on  Manufactured  Goods,  etc.,  are  closed  into  Manufacturing  account.  This  accourit  is  then  closed 
into  the  Trading  account,  which,  according  to  the  statement  at  the  end  of  this  set,  is  closed  into 
Profit  and  Loss  account.  t 

Use  the  Voucher  System.     Make  all  payments  by  voucher  checks. 

5. 

Buy  of  National  Machine  Co.,  Philadelphia,  Pa.,  Looms,  Cards,  Spindles,  etc.,  amounting  to 
$4,257,68;  Machinery,  Shafting,  Pulleys,  etc.,  $485,  paying  cash  for  same.  (This  last  item  comes 
under  the  head  of  Fixtures.) 

8. 

Buy  of  Cushing  &  Co.,  for  cash,  blank-books,  pencils,  pens,  ink,  amounting  to  $52.65. 
Buy  of  Underwood  Typewriter  Co.,  for  cash,  one  typewriter,  $100,  three  desks,  $150,  five 
chairs,  $25,  letter  copying  press,  $12,  mimeograph,  $38.50. 


220        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

11. 

Pay  Williams  &  Wilkins  for  note,  bill  and  letter  heads,  $126.50. 

Receive  from  Baldwin  &  Co.,  Philadelphia,  boiler,  engine,  steam-heating  plant  and  connec- 
tions, and  give  our  check  for  their  bill,  $3,850.     (Debit  Plant  Acct.) 

Pay  freight  to  date,  P.  R.  R.,  $268.54.  Charge  one-half  of  this  amount  to  Plant  and  one- 
half  to  Machinery,  as  it  properly  represents  a  part  of  their  cost. 

15. 

Buy,  for  cash,  from  Miller  Safe  &  Lock  Co.,  of  Baltimore,  1  safe,  $365. 
Pay  Standard  Oil  Co.,  for  1  bbl.  machine  oil,  $18.75. 

Take  out  insurance  policies  on  building  and  contents,  $30,000.     Pay  premium,  |%,  in  cash. 
Buy  of  Brown  Bros.,  Providence,  R.  I.,  1  driving  belt,  for  cash,  $100. 

Pay  Baltimore  Machine  Co.,  for  setting  machinery,  $123.50,  for  putting  in  fixtures5  $53.25, 
installing  plant,  $250. 

Give  check  for  linoleum  for  office,  $42.50. 

Pay  Davis  Coal  Co.,  for  80  tons  coal  at  $3.75  per  ton. 

23. 

Receive  from  Ealdman  &  Co.,  Baltimore,  25  bales,  12,875  lbs.,  cotton,  at  1\$.  per  lb.,  terms, 
N/30. 

Pay  Baltimore  Transfer  Co.  for  hauling  machinery,  $78.25. 

26. 

Buy,  for  cash,  8  horses,  $720,  two  wagons,  $186,  two  carts, 

Pay  telephone  rent,  $48. 

Fay  for  stamps,  $10. 

Pay  for  electric  clock  with  connections, 


FEB.  1. 

Receive  from  all  subscribers  to  capital  stock  cash  for  installment  No.  2,  25%  of  amount 
subscribed. 

Dispose  of  $5,000  worth  of  Unissued  Stock  by  subscription  to  J.  J.  Hill. 

Mr.  Hill  pays  first  two  installments,  50%  of  amount,  subscribed. 

Buy  from  John  Hopkins  Oil  Co.,  1  bbl.  tallow,  510  lbs.  at  5£  per  lb.,  1  bbl.  spindle  oil,  15^ 
gals.,  at  15^  per  gal.,  terms,  2/10  N/30. 

Pay  for  three  months'  rent  of  stable,  $60. 

Pay  for  feed,  $24.50. 

2. 

Pay  pay-roll  for  week  amounting  to  $583.60. 

Sell  to  John  Wanamaker,  Philadelphia,  the  following  bill,  at  14^  per  lb.,  2/10,  N/30. 

5  rolls,  30  in.        No.  10  averaging    86  lbs.  per  roll. 

4     "     36  "  "      8        "         126    "      "     " 

4     "     60  "  "      4         "         210    "      "     " 

2     "     84  "  "    10        "         240    "      "     " 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        221 

Sell  to  J.  B.  Claflin  Co.,  New  York,  on  %,  2/10,  N/30  at  14^  per  lb. 
10  rolls,  54  in.        No.    6  averaging  223  lbs.  per  roll. 

4  "     60  "  "      6        "         248  "     "        " 
1     "     64  "  "6        "         264  "     "       " 

10     "     66  "  "    10        "         189  "     u       " 

10     "     76  "  "    10        "         209  "     "        " 

4. 

Pay  cash  for  5,000  circulars,  $45,  and  an  equal  amount  for  one  cent  stamps  for  mailing  above 
circulars. 

Receive  from  Elliott  Bros.,  19  bales  cotton  of  an  average  weight  of  510  lbs.  at  8^;  terms, 
2%  discount  if  paid  in  15  days. 

6. 

Give  Baltimore  Machine  Co.  our  check  to  pay  for  the  following  articles:  blacksmiths'  forge, 
$30,  2  anvils  at  $10,  1  doz.  assorted  hammers,  $15.60,  50  horse  shoes  at  8j£,  two  tubs  for  cooling 
irons  at  $2.25. 

Sell  Wagner,  Willis  &  Co.,  terms  15  days,  10  rolls  of  76  inch  No.  10,  210  lbs.  per  roll,  at  14^ 
per  lb. 

7. 

Buy  from  Smith,  Dixon  &  Co.,  8,000  lbs.  jute  manilla  wrapping  paper  at  f^  per  lb.,  2/10 
N/30. 

Sell  to  J.  Spencer  Turner,  New  York,  2/10,  N/30,  the  following  bill  at  14^  per  lb. 

4  rolls,  76  in.     No.  6    314  lbs.  per  roll. 

2  "     80  "        "    6    330  "       "      " 

5  "    120  "       "  10    342  "       "      " 
4     "     34  "       "  10       97  "       "      " 

3  "     50  "       "    6    207  "       "      " 

'  Ship  to  Murdock  Commission  Company,  Boston,  Mass.,  to  be  sold  on  our  account  and  risk, 
fifty  rolls,  84",  No.  10,  averaging  240  pounds  per  roll,  at  9^  per  pound. 

Sell  to  Baltimore  Waste  Co.  N/30,  2,425  lbs.  waste  at  3^  per  lb. 

Pay  cash  for  putting  in  automatic  sprinkler  and  fire  extinguisher,  $250. 

Buy  of  Henderson  &  Latham,  50  bales  cotton  of  an  average  weight  of  498  lbs.  at  7fc\  2/10, 
N/30. 

Pay  wages  for  week,  $795.32. 

11. 

Sell  Studebaker  Mfg.  Co.,  South  Bend,  Ind.,  on  their  note  at  30  days,  interest  6%,  (with  the 
understanding  that  if  payments  are  made  before  note  is  due,  the  merchants'  rule  will  be  used  in 
finding  balance  due)  the  following  bill  at  14^  per  lb.: 

20  rolls,  54  in.        No.  6  averaging  223  lbs.  per  roll. 

10     "     76  "  "    10  "       210  "       "      " 

20     "     60  "  "     6  "       249  "       "      " 

5  "     64  "  "     6  "       264  "       "      " 
25     "     66  "          "    10          "       190  "       "      " 

Buy  from  Turnbull  &  Norris,  2/10,  N/30,  100  bales  cotton  weighing  496  lbs.  each  at  7j£  per  lb. 


222        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

12. 

Buy  from  Brown  Bros.,  Providence,  R.  I.,  on  %,  2/10,  N/30,  300  ft.  2\  in.  double  belting  at 
10£  200  ft.  2  in.  single  belting  at' 4^. 

Pay  John  Hopkins  Oil  Co.  for  bill  of  1st,  less  discount. 

Receive  cash  from  John  Wanamaker  for  bill  of  2nd  instant  less  discount. 

13. 

Sell  to  J.  B.  Claflin  Co.,  N/30,  at  14^  per  lb.,  the  following  bill: 
10  rolls,  30  in.        No.  10  averaging  85  lbs.  per  roll. 

4  "     84  "  "    10        "        240  "      "      " 

5  "     36  "  "      8         "        126  "      "      " 

6  "     60  "  "      4         "        210  "      "      " 
Pay  Elliott  Bros,  for  bill  of  4th,  less  discount. 
Pay  for  fire  escape,  and  for  erecting  same,  $360. 
Pay  for  6  tons  hay,  $108,  50  bu.  oats,  $20. 

15. 

Take  300  feet  canvas  belting  to  use  on  your  own  machinery.     (The  material  in  this  belt  is 
worth  30^  a  ft.,  and  you  will  have  to  pay  ?>i  a  ft.  cash  to  have  it  made.) 
Pay  $3  for  having  our  boiler  inspected. 
Receive  of  J.  B.  Claflin  Co.,  on  %,  $350. 
-Pay  cash  for  new  parts  to  looms,  $6.50. 

16. 

Pay  wages  for  week,  $601.68. 

18. 

Pay  Henderson  &  Latham  for  bill  of  9th,  less  discount. 

Sell  John  Wanamaker,  2/10,  N/30,  at  14^  per  lb.,  the  following  bill: 

10  rolls,    76  in.        No.    6  averaging  314  lbs.  per  roll. 

3     "       80  "  "      6         "         330  "       "      " 

5     "     120  "  "    10         "         342  "       "      " 

10     "       34  "  "    10         "  97  "       "      " 

Pay  Smith,  Dixon  &  Co.  for  bill  of  the  7th  less  discount. 
Buy  bill  of  wrapping  paper  of  Smith,  Dixon  &  Co.,  for  cash,  $50. 
Receive  from  Baltimore  Waste  Co.,  check  in  full  of  account. 

19. 

Ship  to  Higgs  Commission  Company,  Brokers,  Chicago.  111.,  to  be  sold  on  our  account  and 
risk,  one  hundred  rolls,  80",  No.  6,  averaging  330  pounds  per  roll  at  9^. 

20. 

Sell  J.  B.  Claflin  Co.,  N/30  the  following  bill  at  14^  per  lb: 

8  rolls,    54  in.        No.    6  averaging  223  lbs.  per  roll. 

5     "       60  "  "      6         "         248  "       "      " 

10     "       64  "  "      6         "         264  "       "      " 

12     "       76  "  "    10        "         209  "       "      " 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        223 

Pay  Brown  Bros,  for  bill  of  11th,  less  discount. 

Pay  $125  to  have  smoke  stack  painted. 

Pay  J.  Frank  Eline,  $300  for  installing  dynamo  in  our  building  to  furnish  electricity  for  light- 
ing, ringing  bells,  etc. 

Pay  McKay  Engineering  Co.  for  wiring  bells,  incandescent  lamps,  fixtures,  etc.,  $85.75. 

Pay  Turnbull  &  Norris  for  bill  of  11th,  less  discount. 

Receive  Account  Sales  from  Murdock  Commission  Company  (Shipment  No.  1,  Murdock 
Commission  Company),  Boston,  Mass.,  showing  our  net  proceeds  to  be  $1250.00.  They  enclose 
a  Bank  Draft  for  the  amount. 

23. 

Sell  to  J.  Spencer  Turner,  2/10,  N/30,  at  UU  per  lb.: 
8  rolls,    54  in.        No.    6  averaging  223  lbs.  per  roll. 

5  "       36  "  "      8         "         126  "       "      " 

6  "       60  "  "      8         "         210  "       "      " 
5     "       84  "  "    10         "         240  "       "      " 

Receive  from  J.  B.  Claflin  Co.,  on  %,  their  note  at  30  days,  interest  6%  for  $1,000. 
Pay  Ealdman  &  Co.,  in  full  of  account. 
Pay  wages  for  week,  $636.54. 

25. 
Pay  for  postage  stamps,  $10. 

Pay  cash  for  2  bbls.,  51  gals,  each,  machine  oil  at  16^  per  gal. 
Receive  from  Studebaker  Mfg.  Co.,  to  apply  on  their  note  of  the  11th  instant,  $250. 

26. 

Buy  of  Elliott  Bros.,  50  bales  cotton,  average  weight  504  lbs.  each,  at  If.  per  lb.,  2/10,  N/30. 

27. 

Wagner,  Willis  &  Co.  several  days  ago  made  an  assignment  in  favor  of  their  creditors.  Their 
business  has  been  disposed  of  so  as  to  pay  75^  on  the  dollar  on  their  indebtedness,  which  amount 
we  accept  in  full  settlement  of  their  account  due  us. 

Sell  Baltimore  Waste  Co.,  1,378  lbs.  waste  at  3&  per  lb.,  terms,  2/10,  N/30. 

28. 

J.  Spencer  Turner  pays  his  account  in  full  less  discount  to  which  he  is  entitled. 
Sell  J.  B.  Claflin  Co.,  N/30,  at  14^  per  lb.: 

8  rolls,    76  in.        No.  10  averaging  209  lbs.  per  roll. 
20     "       66  "  "    10         "         189  "       "      " 

12     "       84  "  "    10         "         240  "       "      " 

8     "       60  "  "      4         "         210  "       "      " 

Receive  check  from  John  Wanamaker  for  bill  of  the  18th,  less  discount. 

MARCH   1. 

Receive  from  all  subscribers  to  capital  stock  cash  for  installment  No.  3. 

Albert  J.  Swan  has  subscribed  for  $25,000  worth  of  Stock,  paying  the  first  three  installments 
by  giving  his  check  for  $5,000,  and  first  mortgage  on  his  property  at  No.  412  Calhoun  St.,  for  the 
balance. 

Pay  for  repairs  to  machinery  $22.60,  and  for  new  parts,  $128.75. 

Pay  freight  bills,  $10.75. 


224        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

2. 
Pay  pay-roll  for  week,  $649.70. 

Buy  of  Baldwin  Co.,  Philadelphia,  a  steam  boiler  to  be  used  in  addition  to  the  one  we  now 
have,  paying  cash,  $300. 

Pay  for  horse  feed,  $68.50. 

4. 

Receive  an  Account  Sales  from  Higgs  Commission  Company  (Shipment  No.  2,  Higgs  Commis- 
sion Company),  Chicago,  111.,  showing  our  net  proceeds  to  be  $3100.00.  They  enclose  a  Cashier's 
Check  for  the  amount. 

Sell  to  John  Wanamaker,  2/10,  N/30,  at  UU  per  lb.: 

10  rolls,  120  in.  No.  10  averaging  342  lbs.  per  roll. 

7  "       34  "  "    10        "  97  "       "      " 

8  "       50  "  "      6         "         207  "       "      " 
5     "       60  "  "      4        "         210  "       "      " 

6. 

Sell  to  Marshall,  Field  &  Co.,  Chicago,  2/10,  N/30,  at  14^  per  lb.: 

5  rolls,  120  in.        No.  10  averaging  342  lbs.  per  roll. 
12     "       50  "  "      6        "         207  "       "      " 

15  "       54  "  "      6         "         223  "       "      " 

5  "       60  "  "      6        "         248  "       "      " 

Sell  to  Baltimore  Waste  Co.,  5,000  lbs.  waste  at  3^,  2/10,  N/30. 
Sell  to  Gimbel  Bros.,  Philadelphia,  2/10,  N/30,  at  14^  per  lb.: 

16  rolls,    36  in.        No.    8  averaging  126  lbs.  per  roll. 
14     "       60  "  "      4         "         210  "       "      " 

6  "  •     84  "  "    10         "         240  "       "      " 
12     "       54  "            "      6         "         223  "       "      " 

7. 

Buy  from  Telfair  W.  Marriott,  5  acres  land  adjoining  our  mill  property,  on  which  to  erect 
houses  for  the  use  of  our  employees,  paying  cash,  $6,000. 

8. 

Sell  to  J.  B.  Claflin  Co.,  2/10,  N/30,  at  U&  per  lb.: 

3  rolls,    76  in.        No.    6  averaging  314  lbs.  per  roll. 

5  "       80  "  "      6         "         330  "       "      " 

4  "     120  "  "    10         "         342  "       "      " 

6  "       60  "  "      4         "         210  "       "      " 

5  "       36  "  "      8         "         126  "       "      " 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         225 


9. 

Pay  roll  for  week  amounts  to  $660.01. 

Receive  balance  due  on  Studebaker  Manufacturing  Company's  note.  (Find  balance  by 
merchants'  rule  for  partial  payments.) 

It  has  been  decided  to  close  the  books  at  this  time  to  ascertain  whether  or  not  we  have  been 
conducting  a  paying  business.  We  find  that  we  have  the  following  resources  and  liabilities  be- 
sides the  personal  accounts,  cash,  bills  receivable  and  bills  payable: 

30  bales  cotton,  average  weight,  500  lbs.,  worth  7£  per  lb. 

5000  lbs.  duck  which  we  estimate  to  be  worth  13^  per  lb. 

We  allow  1%  for  wear  on  the  mill  fixtures,  also  1%  for  depreciation  on  tools. 

Machinery  worth  its  cost,  exclusive  of  repairs  or  new  parts. 

Real  Estate  worth  its  cost. 

Teams,  $950.  - 

Fuel,  $115. 

Office  furniture  and  fixtures  worth  5%  less  than  cost. 

Interest  due  us  on  one  note  and  interest  payable  on  one  note. 

Insurance  unexpired,  $110. 

Wrapping  paper,  $25. 

Oil,  $15. 

Waste,  $30. 

Salary  owed  to  the  manager  $400. 

Create  a  Reserve  of  $200  out  of  profits  to  take  care  of  losses  on  doubtful  and  bad  accounts. 

After  closing  the  books  and  prior  to  making  the  second  trial  balance,  make  the  proper  entries 
for  $2000,  invested  today  in  United  Railways  Bonds  at  100.     Charge  the  amount  to  Sinking  Fund. 

You  may,  after  having  closed  your  Ledger,  write  answers  to  the  following  questions: 

At  what  per  cent,  of  gain  were  goods  sold? 

What  per  cent,  of  total  cost  of  manufacture  was  cost  of  cotton? 

What  per  cent,  of  total  cost  of  manufacture  was  wages? 

Have  we  (in  your  estimation)  been  conducting  a  profitable  business,  considering  the  amount 
of  capital  invested,  and  the  risk  incident  to  carrying  on  such  business? 
•     Take  a  Trial  Balance. 

INCOME  AND  PROFIT  AND  LOSS  STATEMENTS  (See  illustration,  pages  226  and  227). 

273.  A  statement  of  Income  and  Profit  and  Loss  begins  with  the  gross  sales.  From  this 
figure  is  deducted  the  returns,  also  all  allowances  made  to  customers  for  defective  goods  and  for 
breakage  and  other  damages  and  losses.  A  proportion  or  percentage  of  the  stable  and  garage 
expense  and  outward  freight  should  also  be  deducted  at  this  point.  The  result  gives  us  the  net 
income  from  sales. 

The  next  thing  is  to  find  the  cost  of  bringing  in  this  income.  This  is  called  figuring  the  cost 
of  goods  sold  or  the  "Turnover."  We  begin  in  this  group  with  the  gross  outlay  in  respect  of  all 
Materials  and  Supplies  purchased.  Next  the  returns  are  deducted  which  gives  us  the  net  pur- 
chases. To  this  figure  is  added  a  proportion  of  the  stable  and  garage  expense  and  the  inward  freight, 
also  the  expense  of  running  the  purchasing  department.  The  result  is  the  total  cost  of  purchases. 
From  this  figure  is  deducted  all  allowances  made  to  us  in  respect  of  breakage  and  other  damages. 
We  next  apply  to  this  result  the  difference  between  the  opening  and  closing  inventories,  and  get 
as  the  outcome,  the  cost  of  materials  and  supplies  consumed  in  manufacturing.  The  following 
items  are  next  added, — Direct  Labor  and  Factory  Expense  the  latter  covering  superintendence, 
indirect  labor,  salaries  of  factory  clerks,  factory  office  expense,  heat,  light  and  power,  factory  sup- 
plies, repairs  and  renewals,  depreciation  of  machinery,  etc.,  etc.     The  result  now  is  the  total  manu- 


226  MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Philadelphia  Manufacturing  Company 
Statement  of  Income  and  Profit  and  Loss  for  Month  Ending  September  30,  19-- 


Sheet  1, 


Income :- 

Prom  operation: 
Gross  sales 

Less  returns 
Net  Sales 

Deductions  from  sales- 

Sales  allowances 

Outward  freight  and  cartage 

Proportion  of  stable  and  garage  expense 
Total  deductions 
Income  from  sal-ps 

Cost  of  goods  sold: 

Manufacturing  Cost  (factory  cost): 
Gross  purchases 
Less  returns 
Net  purchases 
Add: 

Inward  freight  and  cartage 
Duty 

Proportion  stable  and  garage  exp. 
Lab  o  r- -&•  t  o  rage  dept. 
Total  additions 
Total  cost  of  purchases 

Deductions  from  purchases: 
Allowances 

Total  Deductions 


200.00 
300.00 
200 . 00 
300 . 00 


27.50 


Net  cpst  of  purchases 

Deduct  increase  in  inventory  of  materials 
ahd  supplies 

Cost  of  purchases  consumed  in  mfg. 

Manufacturing  supplies 

Labor 

Superintendence 

H£at,  light  and  power 

Bepairs  to  machinery 

Other  repairs  and  renewals 

Provision  for  depreciation  on 
Bldgs .  and  equip. 

Office  salaries—factory 

Office  expenses--   " 
Miscellaneous  factory  expense 

Total  charge  to  manufacturing 

Add  decrease  in  inventory  of  goods  in  process 
.Manufacturing  or  factory  cost 

Deduct  increase  in  inventory  of  finished  goods 
Total  cost  of  mfg.  goods  sold  (Turnover) 
Gross  profit  on  sales  (For"d) 


94 
490 
234 


20725 
42 


20682 


1000 


21682 


27 


21655 
2788 


18866 

214 

13076 

1300 

80 

42 

20 

1000 

375 

98 

120 


36549 
1111 


37661 
]605 


50 


53284 
317 


52967 


819 


52147 


60 
60 


00 


10 


90 


36055 


16092 


60 
30 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


227 


Shnnt.  .fl. 


Forward  (Gross  Profit  on  Sales) 
Selling-  expense: 

Salaries  of  salesmen 
Traveling  expense  of  salesmen 
Commissions  to  salesmen 
Advertising 

Total  selling  expense 
Selling  profit 

Administrative  expense. 
Salaries  of  officers 
Salaries  of  general  office  clerk? 
Stationery  and  printing  expense 
Postage  expense 
Telephone  and  Telegraph 
General  office  expense 
Legal  expense 
General  expense 

Total  administrative  expense 
Net  profit  on  sales--income  from  operation 

Prom  sources  other  than  operation: 

Income  from  securities  owned 

Interest  on  bank'  balance 

Rent  on  factory  sheds 

Interest  on  notes  receivable 

Cash  discount  on  purchases 
Total  other  income 
Income  from  operation  and  other  sources 

Deductions  from  income: 

Interest  on  bonds  and  mortgage  payable 

Interest  on  first  mortgage  bonds  payable. 

Interest  on  notes  payable  ^ 

Cash  discount  on  sales 

Rent 

Taxes 

Insurance 

Royalty  Expense 

Total  deductions  from  income 
Total  net  income  from  all  sources--Profit  and  Loss 

Profit  and  Loss  charges: 

Provision  Tor  depreciation,  furniture  and  fixture 
Provision  for  doubtful  accounts 
Good-will--written  off 
Organization  expense--written  off 
Discount  on  bonds—written  off 
Patents—written  off 
Provision  for  redemption  of  bonds 
Total  Profit  and  Loss  charges 
Profit  and  Los"s  for  the  period — credit  to  Surplus 

Dividend  declared — charge  to  Surplus 
Net  credit  to  S'urplus  for  period  ending  Sept.  30,  19-- 


1579 
421 
535 

2096 


300 

200 

8 

16 

18 

100 
75 

115 


250 
53 
30 
22 

459 


300 
600 
300 
238 
400 
337 
218 
100 


200 
200 
500 
500 
200 
149 
400 


16092 


4631 


11460 


80 


90 
40 


834 


10626 


00 
40 


815 


11442 


80 
20 


2495 


8947 


20 
00 


2149 


6798 
3600 


3198 


00 
00 

00 


228        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

facturing  cost.  We  next  apply  the  increase  or  decrease  in  the  inventory  of  the  goods  in  process, 
also  the  increase  or  decrease  in  the  inventory  of  finished  goods.  Our  result  now  is  the  actual  and 
total  cost  of  sales.  Deducting  this  from  the  net  income  from  sales,  gives  us  the  gross  profit  on 
the  manufactured  goods  which  have  been  sold. 

From  this  result  we  next  deduct  the  selling  expenses  as  follows, — salaries,  traveling  expense, 
commissions,  advertising,  entertainment  of  customers,  office  expenses,  etc.,  etc. 

Next  in  order  is  deducted  the  administrative  expense,  such  as, — salaries  of  officers,  salaries 
of  general  office  clerks,  stationery  and  printing  expense,  postage,  telephone,  telegraph,  general 
office  expense,  legal  expense,  general  expense,  directors'  fees,  traveling  expenses  of  officers  and  clerks. 
Result, — Net  profit  on  sales — income  from  plant  operation. 

To  this  vitally  important  result,  we  next  add  all  items  of  income  from  sources  other  than 
from  operating  the  plant.     Some  of  these  are, — 

Interest  on  bonds  owned 

Dividends  on  stocks  owned 

Interest  receivable  on  bonds  and  mortgages 

Cash  discount  on  purchases 

Interest  on  bank  balances 

Interest  on  notes  and  acceptances  receivable 

Rent  (receivable) 

Royalties        (        "        ) 

Commissions  (        "        ) 

Accumulation  on  bonds  bought  below  par. 
Next  are  subtracted  the  deductions  from  income,  as  follows, — 

Interest  on  bonds  and  mortgage  payable 

Interest  on  accounts  payable 

Interest  on  loans  and  notes  payable 

Cash  discount  on  sales 

Rent  (payable)  "*•» 

Insurance 

Taxes 

Royalties  (payable). 
Next  are  deducted  the  profit  and  loss  charges  as  follows, — 

Provision  for  depreciation — buildings  and  equipment 

Provision  for  doubtful  accounts 

Provision  for  depreciation— furniture  and  fixtures 

Good-will — written  off 

Organization  expense — written  off 

Discount  on  bonds — written  off 

Patents — written  off. 
Whatever  is  left  is  now  charged  to  Profit  and  Loss  account  and  credited  to  Surplus  account. 
The  Surplus  account  is  next  charged  with  the  amount  of  any   dividend  that  the  directors 
may  decide  to  declare,  Dividends  account  being  credited  at  the  same  time. 

Whatever  is  left  in  Surplus  stands  as  a  credit  balance  and  appears  on  the  liability  side  of  the 
Balance  Sheet. 

When  constructing  the  statement  of  Income  and  Profit  and  Loss,  create  a  Reserve  for 
Unexpected  Renewals  to  take  care  of  more  than  ordinarily  serious  machinery  breakdowns.  Add 
to  this  reserve  by  charging  off  a  portion  of  the  net  profits  to  it  at  the  end  of  each  fiscal  period. 
The  rate  will  be  3%  of  the  present  value  of  machinery.  In  the  same  manner  create  a  Reserve 
for  Depreciation,  the  rate  being  4%,  based  upon  the  present  value  of  plant,  machinery,  and  other 
fixed  assets. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        229 

MANUFACTURING  STATEMENT,  TRADING  STATEMENT,  AND  PROFIT  AND  LOSS 

STATEMENT 

274.  Some  accountants  instead  of  using  the  form  of  Income  and  Profit  and  Loss  statement 
outlined  in  Article  273  and  illustrated  on  pages  226  and  227,  arrive  at  the  same  result  by  construct- 
ing a  Manufacturing  Statement,  a  Trading  Statement  and  a  Profit  and  Loss  statement  such  as  are 
illustrated  on  pages  230  to  232. 

The  Manufacturing  Statement  shows  the  cost  of  making  the  goods  (the  factory  cost) ,  up  to  the 
time  they  are  completed  and  ready  for  sale. 

The  balance  of  the  Manufacturing  Statement,  which  shows  the  cost  of  the  goods  made  plus 
the  money  expended  upon  goods  partly  made  (in  process),  is  carried  down  to  the  debit  side  of  a 
Trading  Statement,  which  shows  the  cost  of  manufacture  plus  the  cost  or  expense  of  selling,  col- 
lecting, running  an  office  and  all  the  losses  and  profits  incidental  to  the  headings  mentioned,  ^- 
e.g.  freights  outward,  cost  of  maintaining  a  shipping  department,  defalcations  of  collectors  or  other 
employes,  commissions  paid  to  special  collectors,  legal  fees,  office  rent,  cost  of  administration  and 
general  expense. 

Up  to  this  time,  we  have  dealt  only  with  outlay  or  cost.  On  the  credit  side  of  the  Trading 
Statement  is  placed  the  net  amount  of  sales.  This  figure  represents  income.  The  difference  be- 
tween the  columns,  if  on  the  credit  side,  is  carried  down  to  the  credit  side  of  a  Profit  and  Loss  State- 
ment, as  Undivided  Profit.  The  debit  side  of  the  Profit  and  Loss  Statement  shows  the  provisions 
made  for  the  various  reserves  considered  vitally  important  by  up-to-date  managers  and  the  appor- 
tioning of  profits — part  as  a  periodic  Dividend  and  part  as  carried  to  a  Surplus  account  or  other 
similar  accounts.  The  remainder  or  balance  of  the  Profit  and  Loss  Statement,  which  is  also  the 
balance  of  the  Loss  and  Gain  account  in  the  Ledger,  is  carried  down  to  Undivided  Profits. 

When  this  form  of  statement  is  used,  as  in  the  case  of  the  other  form  of  statement,  reserves 
should  be  created  to  care  for  unexpected  renewals  necessitated  by  more  than  ordinarily  serious 
breakdowns  of  machinery,  for  depreciation  of  plant,  machinery  and  other  fixed  assets,  and  for  bad 
and  doubtful  debts. 


230         MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Manufacturing  Costs  Statement  for. 
Fiscal  Period  Ending  March  9,  19-- 


Section  1, 


Mar.  11,  19-- 


30 


40 


50 


60 


70 


80 


90 


100 


110 


20]  Cotton,  outlay,  20000. 

Less  disct.  allowed,         300, 

Net  cost  of  cotton, 

Cotton  on  hand  3/9/19 — , 

"    consumed  during  the  period, 

Paper,  outlay, 

Less  disct.  allowed, 
Net  cost  of  paper, 
Paper  on  hand  3/9/19--, 

•'   consumed  during  the  period, 

Oil,  outlay, 

Less  disct.  allowed, 
Net  cost  of  oil, 
Oil  on  hand  3/9/19--, 
"  consumed  during  the  period, 

Puel,  outlay, 

■  on  hand  3/9/19--, 

■  consumed  during  the  period, 

Mill  Fixtures,  outlay, 

Less  disct.  allowed, 
Net  cost  of  fixtures, 
Mill  inventory,  3/9/19--, 
"   depreciation, 

Teams,  outlay, 

"    inventory,  3/9/19--, 

•  depreciation  and  upkeep, 

Tools,  outlay, 

■  inventory, 
"    depreciation, 

Office  Fixtures,  outlay, 

■  "     inventory, 

*  "     depreciation, 

Insurance,  outlay, 

"      unexpired, 

"      expired  or  consumed, 

Wages  up  to  and  including  week 

ending  Mon.,  3/4/19--,  outlay,  3500. 

Wages  for  5  days,  owing- 
unpaid  outlay,  500. 

Total     " 


19700.- 

1000.- 

iod, 

400.- 

10.- 

390.- 

100.- 

Dd, 

100.- 

1.- 

99.- 

. 

10.- 

> 

600.- 

100.- 

>d, 

2000 . - 

10.- 

1990.- 

1900.- 

2000.- 

* 

1800.- 

- 

100.- 

90.- 

1000.- 

990.- 

200.- 

100.- 

Torwardi 


18700 


290 


89 


500 


90 


200 


10 


10 


100 


4000 
23989 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         231 


120 


Freight  and  Express,  outlay 
New  Parts  and  Repairs,   ■ 


Brought  Forward 


Total  cost  of  manufacturing, 

Gross  costs  to  Trading  Statement  (Section  2) 


23989 
100 
200 


24289 


24289 


24289 


24289 


Section  2. 


Trading  Statement  for 
Fiscal  Period  Ending  March  9,  19- 


220 
140 


150 


170 


190 
210 
230 


Income. 

Manufacturing,.  Sales,  50000.- 

Less  Disct.  allowed  1000.- 

Net  sales  for  period  ending  3/9/19 —         49000 
Finished  goods  on  hand  3/9/19 —  10000 

Finished  goods,  output  59000 

Waste,  sales,  period  ending  3/9/19 —  200.- 
",    on  hand,  3/9/19--,  100.- 

■    output  300 

Factbry  output  for  fiscal  period, 

Profit  on  shipment  of  goods  sold  on  commission 

Expenditure 

Cost  of  manufacturing  from  Manufacturing  Cost 
Statement  (Section  1) 

General  Expenses,  (administration,  etc.)  outlay, 

Lost  Accounts  and  Notes,  uncollectible  claims 

Int.  and  Disct.  owing  others  fliability  inventory), 

100. 

■  "    ■    owing  us, 

(resource  inventory)   10.- 

■  ■    ■    allowed  us  30.- 

"    "    "    total  income  40. 

"    "    ■    net  expenditure 
Total  Expenditure  for  period  ending  3/9/19-- 

Net  profits  from  trading  to  Statement  of  Profits 
and  Losses  (Section  3). 


24289 

10000 

1000 


60 


35349 

24051 
59400 


59300 
100 


59400 


59400 


232        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 


Section  3 


Statement  of  Profit  and  Loss  Account 
for  Fiscal  Period  ending  March  9,  19-- 


240 
250 

270 

280 
300 


Net  profit  from  trading  from  Trading  Statement 
(Section  2) 

Losse* 

Reserve  for  Bad  and  Doubtful-  Debts  (2<f0   on  accounts 

receivable) 
Reserve  for  Unexpected  Renewals  (3$  based  on  present 
value  of  machinery  and  plant) 


Reserve  for  Depreciation  (4$  based  on  present  value 
of  plant,  machinery,  etc.) 

Net  Gain  Apportioned 

Dividend    (ljtf£  on  issued  stock) 

Surplus-profits  reserved  from  division  among 

shareholders 
Undivided  profits 


400 
500 

2000 

8000 


10000 
3151 


24051 


24051 


24051 


BALANCE  SHEETS. 

275.  A  double  entry  set  of  books,  through  the  Trial  Balance,  before  the  books  are  closed, 
shows  four  important  elements  in  accounting,  namely, — resources  and  liabilities,  profits  and 
losses.  Closing  the  books  cuts  out  two  of  these  elements,  namely, — the  profits  and  losses.  A 
Trial  Balance  taken  after  closing  the  books  contains  a  list  of  accounts,  showing  only  resources 
and  liabilities.  From  the  Second  Trial  Balance  we  will  construct  our  Balance  Sheet.  The  stu- 
dent will  rule  up  a  sheet  of  paper  like  the  one  shown  on  page  233,  and  following  the  form  given, 
construct  a  Balance  Sheet  for  presentation  to  the  Board  of  Directors  of  the  company. 

276.  On  the  left  hand  side  of  the  sheet  we  will  list  the  assets  in  the  order  of  their  permanency. 

FIXED  ASSETS. 

277.  Under  this  heading  will  be  listed  assets  of  a  fixed  nature,  ones  that  will  not  be  converted 
into  money  while  the  business  exists,  because  the  concern  needs  these  assets  to  go  ahead  with  its 
work.  Examples:  lands,  buildings,  plant,  machinery,  mill  fixtures,  tools,  office  fixtures,  vats, 
wells,  canals,  mines,  tunnels,  etc. 

AVAILABLE  ASSETS. 

278.  Under  this  heading  will  be  listed  assets  of  an  easily  convertible  nature,  ones  which  can 
be  turned  easily  and  readily  into  money.  The  success,  and,  in  fact,  existence  of  a  concern  depends 
upon  the  quickness  of  these  assets,  or  the  concern's  ability  to  get  ready  money  out  of  them  at  the 
proper  time.  Examples:  cash,  accounts  receivable,  bills  receivable,  mortgage  receivable,  finished 
goods,  material  on  hand,  oil,  paper,  fuel,  interest  accrued,  etc. 


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234         MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

DEFERRED  ASSETS. 

279.  Under  this  heading  will  be  listed  assets  of  a  nature  which  makes  it  difficult  to  turn  them 
quickly  into  cash  at  any  time,  especially  in  the  near  future.  As  the  name  implies,  these  assets 
represent  values  which  will  some  time  be  received  but  the  cash  value  of  which  cannot  be  secured 
for  present  use.  Examples:  Reserve  funds,  amounts  due  from  shareholders,  unissued  stock,  treas- 
ury stock,  etc. 

DEFICIENCY. 

280.  Should  the  Capital  Stock  and  the  Current  Liabilities  taken  together,  ever  exceed  the 
sum  of  the  assets,  the  difference  will  appear  upon  the  asset  side  of  the  Balance  Sheet,  the  figure 
having  been  charged  against  Deficiency  account.  Although  not  an  asset  of  a  nature  similar  to 
those  mentioned  above,  it  must  be  listed  along  with  them. 

LIABILITIES. 

281.  The  liabilities  on  the  balance  sheet  of  most  companies  appear  on  the  right-hand  side 
the  sheet  and  are  listed  as  below: 

1.  Capital  stock  for  the  authorized  capitalization,  showing  the  number  of  shares  and  the  par 
value  of  each;  the  number  of  shares  issued  of  each,  common  and  preferred  stock. 

2.  Bonds  and  mortgages  payable,  representing  the  permanent  debt. 

3.  Current  Liabilities,  sometimes  called  Floating  Debt.  Examples:  accounts  payable, 
bills  payable,  unpaid  wages,  unpaid  dividends,  etc. 

4.  Reserves .  The  purpose  of  creating  reserves  is  to  give  the  concern  more  strength.  If 
all  the  profits  are  paid  over  to  shareholders,  the  business  never  becomes  any  stronger,  but  steadily 
weaker.  The  undertaking  needs  the  extra  strength,  or  reserve  force,  in  the  event  of  sudden  and 
unexpected  losses,  because  of  the  failure,  say  of  several  customers  (trade  debtors),  the  total  break- 
down of  some  important  machine,  which  cripples  the  plant  until  it  is  replaced,  or  breakdowns 
caused  by  depreciation,* — wear  and  tear, — which  we  have  overlooked  in  our  periodic  accounting. 

5.  Surplus.  This  represents  an  amount  of  net  profit  which  has  not  been  paid  over  to  share- 
holders, but  has  been  reserved  to  enable  us  to  be  sure  of  paying  future  dividends  which  we  might 
not  otherwise  be  able  to  pay  at  the  end  of  some  fiscal  year,  because  of  lack  of  profits.  If  a  sur- 
plus has  been  created,  we  will  probably  always  be  able  to  pay  dividends  each  year,  even  during 
the  bad  years  when  profits  are  scarce. 

6.  Undivided  Profits.  After  all  provisions  have  been  made  (dividends  set  aside,  reserves 
for  bad  debts,  unexpected  renewals,  depreciation,  etc.,  have  been  created,  and  a  surplus  also 
provided  for)  the  figures  of  net  profit  remaining  is  credited  to  an  account  called  Undivided  Profits. 

WRITTEN  TEST  No.  19. 

1.  Define  a  Joint  Stock  Company  and  show  its  advantages  over  a  Partnership.  Define  a 
Limited  Joint  Stock  Company. 

2.  What  are  the  liabilities  of  a  member  of  a  Partnership ;  of  a  stockholder  in  an  ordinary  Joint 
Stock  Company?     In  a  limited  Joint  Stock  Company? 

3.  What  is  a  Corporation  and  what  are  the  liabilities  of  its  stockholders? 

4.  Describe  fully  the  successive  steps  in  the  organization  of  a  Corporation. 

5.  Define  surplus,  Surplus  account,  dividend,  Dividend  account,  Issued  Stock  account,  Treas- 
ury Stock,  Treasury  Stock  account,  Capital  Stock,  Capital  Stock  account,  Unissued  Stock,  Unissued 
Stock  account. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        235 

6.  What  are  the  books  needed  to  show  the  corporate  transactions  of  a  business? 

7.  Describe  a  Stock  Ledger.     With  what  account  in  the  General  Ledger  should  its  balance 
agree? 

8.  Describe  the  Reserve  for  Bad  Debts  account  and  explain  when  and  with  what  it  will  be 
debited  and  credited. 

9.  Explain  the  use  of  Depreciation  account,  and  show  its  advantages. 

10.  What  are  Public  Corporations?    Private  Corporations? 

11.  What  is  a  Charter?    From  whom  is  it  obtained?    What  does  it  show? 

12.  What  is  a  Stock  Certificate?    Paid-up  stock? 

13.  How  does  the  bookkeeping  of  an  incorporated  business  differ  from  that  of  an  individual 
or  a  firm  (1)  as  to  opening  entries,  (2)  as  to  closing  entries,  (3)  as  to  accounts,  (4)  as  to  books  kept? 

14.  Describe  the  change  from  a  Partnership  to  a  Corporation  as  it  shows  on  the  books. 

15.  Supposing  the  present  worth  of  the  business  is  now  $50,000,  could  the  partners  organize 
a  Corporation  whose  capital  stock  is  $100,000? 

16.  Describe  the  bookkeeping  required  to  show  a  change  of  this  sort,  when  the  same  set  of 
books  is  to  be  used. 

17.  What  is  a  Manufacturing  account? 

18.  What  items  are  entered  into  this  account  and  when? 

19.  What  is  an  Undivided  Profits  account,  and  when  used? 

20.  When  is  an  Undivided  Profits  account  debited  and  when  credited? 

21.  Why  are  personal  accounts  equated? 


236        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

COST  ACCOUNTING. 

282.  Cost  is  of  vital  importance  to  the  manager  of  any  business.  The  up-to-date  account- 
ant has  an  opportunity  in  this  branch  of  his  profession,  to  show  his  real  worth. 

TRUE  COST. 

283.  True  Cost  includes,  first,  direct  labor;  second,  material;  and  third,  expense.  The  last 
item  will  admit  of  further  subdivision  and  originates  from  two  sources :  first,  the  expense  of  operat- 
ing the  workshop,  mill  or  factory  itself;  second  the  expense  of  maintaining  offices  and  the  cost 
of  administration. 

The  cost  of  production,  therefore  divides  itself  into  the  following  items. 

Direct  Labor xxxx.xx 

Material xxx.xx 

Factory  Expense xx.xx 

General  Expense xx.xx 

Manufacturing  Cost xxxx.xx 

SELLING  EXPENSE. 

284.  The  selling  expense  is  figured  separately  when  computing  cost  in  large  concerns,  but 
when  the  business  is  small,  the  selling  expense  is  generally  figured  in  along  with  administration, 
or  general  expense. 

BASIS  OF  COST  ACCOUNTING. 

285.  In  arranging  a  cost  system  there  must  be  a  basis.  The  best  authorities  make  that  basis, 
direct  labor,  as  the  amount  paid  for  operating  expenses  (wages  of  foremen,  sub-foremen,  inspec- 
tors, shop  clerks,  tool  keepers,  grinders,  the  up-keep  of  tools  and  machines,  lighting,  etc.)  is  closely 
related  and  directly  dependent  upon  the  number  of  men  employed  on  direct  labor.  Reduce  the 
number  of  producing  laborers  and  the  operating  expenses  can  be  cut.  Less  supervision  is  re- 
quired; the  wear  and  tear  on  machinery  and  tools  is  less,  etc. 

DISTRIBUTION  OF  COST  BY  PER  CENT.  METHOD. 

286.  Accounting  authorities  have  settled  upon  the  Per  Cent.  Method  as  being  the  most  ac- 
curate and  at  the  same  time,  most  simple.  By  means  of  a  percentage,  or  rate,  we  are  able  to  dis- 
tribute the  overhead  cost,  administration,  operating  expenses,  etc.,  over  any  operation,  or  series 
of  operations.  Knowing  the  cost  of  material  and  direct  labor,  which  are  both  easy  to  ascertain, 
we  are  able  with  the  rate,  based  upon  the  cost  of  direct  labor,  to  figure  the  overhead  expense  and 
get  the  exact  cost.  In  other  words,  the  cost  of  the  output  from,  say,  the  Blacksmith  Department 
would  be  the  cost  of  the  direct  labor  of  the  department,  plus  the  material  used,  plus  the  operating 
expense  of  the  department,  plus  its  share  of  the  general  expenses  of  the  whole  plant.  There  is 
no  estimating  in  any  step  of  the  work.  We  just  figure  the  relation  between  productive  labor  and 
operating  expenses,  also  between  productive  labor  and  administration  expenses,  and  express  the 
results  as  so  many  per  cent.  These  percentages  are  the  rates  which  are  absolutely  essential  in 
cost  accounting  by  the  Per  Cent.  Method.  No  matter  how  many  departments  there  are,  using 
figures  easily  taken  from  business  accounts,  we  simply  get  the  percentage  which  shows  the  relation 
between  the  elements  mentioned  for  each  department.  In  the  following  example  let  the  direct 
labor  charge  be  $60,  material  $40,  factory  expenses  figured  at  25%  of  the  direct  labor  and  general 
expense  40%  of  the  direct  labor.     Figuring  this  out  we  have  the  following: 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        237 

Direct  Labor $60.00 

Material. .- 40.00 

Factory  Expense  (25%  D.  L.) 15.00 

Factory  Cost $115.00 

General  Expense  (40%  D.  L.) 24.00 

Manufacturing  Cost $139.00 

ADVANTAGES  OF  PER  CENT.  METHOD. 

287. 

1.  It  is  based  on  actual  figures  easily  extracted  from  the  regular  books  of  account;  figures 
which  are  a  true  statement  of  facts.     There  is  no  guessing  or  estimating. 

2.  The  totals  may  be  taken  from  the  books  for,  say,  the  last  year,  six  months,  or  three  months, 
and  from  these  we  can  easily  figure  the  rate  for  the  next  three  months,  six  months,  or  other  period 
not  longer  than  one  year  because  what  has  been  the  average  rate  over  a  term  of  moderate  length 
is  practically  sure  to  be  the  average  over  the  next  succeeding  similar  term  under  like  conditions. 

3.  It  can  be  used  in  any  manufacturing  plant,  and  in  all  the  departments  of  the  plant,  thereby 
assuring  uniformity.     It  will  enable  the  manager  to  tell  just  what  each  department  is  doing. 

4.  The  rate  can  be  so  easily  figured  at  the  end  of  each  period,  that  changes  in  the  rate  will 
be  made  to  keep  pace  with  changed  conditions. 

5.  It  requires  little  work  from  the  cost  clerk. 

6.  It  is  so  sample  that  a  junior  clerk  can  handle  it  for  a  large  company,  only  a  rudimental 
knowledge  of  Commercial  Arithemetic  being  needed. 

7.  Figuring  by  percentage  can  be  done  rapidly. 

8.  The  per  cent,  system  is  endorsed  by  the  best  accountants. 

RATE  CALCULATIONS. 

288.  In  order  to  get  the  cost  of  direct  labor  the  pay-roll  should  be  divided  into  two  parts 
productive  or  direct  labor,  and  unproductive,  or  indirect  labor.  The  latter  is  often  referred  to  as 
part  of  the  operating  expenses. 

289.  Productive  Labor.  Wages  paid  to  workmen  for  labor  spent  in  producing  things  which 
are  offered  by  the  manufacturer  for  sale  and  from  which  the  business  derives  its  regular  income, 
is  properly  classed  as  productive  labor,  or  direct  labor.  The  amount  of  productive  labor  is  com- 
mensurate with,  or  in  direct  proportion  to,  the  output. 

290.  Non-Productive  Labor.  All  labor  not  distinctly  productive  as  just  outlined  must  be 
classed  as  non-productive,  or  indirect  labor.  This  includes,  foremen,  sub-foremen,  watchmen,  the 
various  factory  clerks,  the  maintenance  of  their  offices,  repairs,  renewals,  tools,  etc.,  and  all  the 
many  expense-men  not  working  on  product,  but  necessary  to  keep  the  plant  in  repair  and  opera- 
tion. Non-productive  labor  is  necessary  to  keep  the  factory  organization  up  to  concert  pitch  but 
it  does  not  directly  regulate  the  quantity  of  the  production. 

291.  Periods  for  Figuring  Rates.  As  there  is  liable  to  be  some  item  of  extraordinary  expense 
in  any  month,  calculations  made  on  conditions  shown  by  one  month's  operations  are  liable  to  be 
found  misleading  but  calculations  made  on  results  of  operation,  running  over  six  months  or  more 
will  give  an  average,  setting  forth  quite  accurately  the  true  percentages  of  factory  expense  and 
general- expense  as  compared  to  the  cost  of  direct  labor  in  a  manufacturing  plant's  activities.  How- 
ever, in  the  work  which  the  student  is  about  to  take  up,  we  will,  in  order  to  facilitate  and  shorten 
the  work,  use  one  month's  manufacturing  as  the  basis  for  comparison.  From  this  month's  work 
we  will  secure  results  which  will  show  us  the  rate  of  overhead  expenses  for  the  following  period. 


238        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

COST  ACCOUNTING  SET. 

June  1st,  19 — . 

The  boat  building  business  of  R.  J.  Bonsall  and  H.  J.  Fields,  conducted  at  Alleghany  Avenue 
and  Delaware  River,  Philadelphia,  under  the  firm  name  of  Bonsall  &  Company,  decided  to  incor- 
porate under  the  name  of  Philadelphia  Boat  Building  Company.  The  capitalization,  or  Capital 
Stock,  authorized  by  the  charter  secured  under  the  laws  of  Pennsylvania,  is  $5000  (50  shares  of 
$100  each).  As  the  Pennsylvania  statute,  regulating  the  formation  of  corporations,  stands,  there 
must  be  at  least  three  incorporators,  one  of  whom  must  be  a  citizen  of  Pennsylvania.  In  order 
to  get  a  charter  in  Pennsylvania,  was  asked  to  sign  the  application  for  a  charter, 

(Student's  name) 

and  become  one  of  the  shareholders.     He  agreed  to  become  the  third  incorporator  and  to  take 
ten  shares  of  the  Capital  Stock  at  par. 

Following  is  the  Balance  Sheet  of  the  firm,  Bonsall  &  Company.     May  31,  19 — . 


ASSETS . 

Cash  in  hand $10 

"    "  bank .500. . $310.00 

Building  (Delaware  River  and 

Allegheny  Ave)  . . .' 400.00 

Lot  (at  above  mentioned  location) .200.00 

Machinery  (per  inventory) 300.00 

Moulds  and  Patterns  " 20.00 

Tools  »  '  .  '  5o!oO 

Oil,  Machine  (20  gals.  @  50/) 10.00 

Coal  (8  tons  @  $2.50) 20.00 

Mill  Fixtures  (per  inventory) 50  .00 

•Office  Fixtures  ■      ■     .....  20.00 
Finished  Product,  26  yacht 

tenders  @  $20       ....$520. 

16   row  boats  @  $8. . . .128.      648.00 

Hardware , 

100  lbs.  Copper  nails  @  15/.  15. 

200  lbs.  Galv.  nails  @  5/...  10. 

48  prs.  7  ft.  oars  @  75/ 36. 

48  prs.  Brass  oar  locks 

@  20/ 9t60 

48  prs.  Galv.  oar  locks 

@  9^ 4.32 

100  lbs.  Miscl.  @  10/ 10.00 '   84.92 

Paints  &  Varnishes, 

100  lbs.  White  lead  @  7/.    7.00 

■   "   Putty  @  2/ 2.00 

50  gals.  Linseed  oil  @  70/. 35. 00   44.00 


Lumber, 

400  ft.  White  oak®  5/ 20.00 

Cypress  @  3/. 30.00 

White  Cedar  @  8/.. 80. 00 
Red  Cedar  @  6/. .. .60.00 
i  round,  £  Cedar 
Mahogany  Moulding  @  3/. . .15.00 
100  ft.  Honduras  Mahog. 

@  15/ -15.00 

Good  will 


1000 

1000 

1000 

500 


220.00 

200.00 
2576.92 


LIABILITIES. 
Accts.  Payable. 

C...B.  Coles  &  Sons,  Inc. 

Camden,  N.  J $75.00 

Theo.  C.  Ulmer,  Richmond 

St.  &  E.  Columbia  Av. 

City .200.00  $275.00 

R.  J.  Bonsall* s  Stock 

Account 1215 .  67 

H.  J.  Field's  Stock 

Account 1086 .  25  2301 .  92 


2576.92 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        239 

A.  J.  Bonsall  received  for  his  interest  in  the  old  business,  twelve  shares  of  stock,  full-paid 
and  cash  for  the  balance. 

H.  J.  Field  received  for  his  interest  ten  shares,  full-paid  and  cash  for  the  balance.  The  fol- 
lowing Journal  entry  will  adjust  matters  on  the  new  books  of  the  Company: — 

Unissued  Stock 1800 

Subscribers 3200 

R.  J.  Bonsall  12  shares 1200 

H.J.  Field,      10      "  1000 

10       "    1000 

(Student's  name) 

To  Capital  Stock 5000 

A.  J.  Bonsall  Stock  % 1200 

H.J.  Field        "       "    .1000 

Subscribers 2200 

Interests  in  the  old  business  transferred  to  the  corporation. 

Pay  R.  J.  Bonsall  balance  on  his  Present  Worth  over  and  above  the  stock  issued  to  him,  $15.67. 

Pay  H.  J.  Field,  $86.25  for  a  like  purpose.  (Cash  account  should  be  credited  with  these 
amounts  and  their  capital  accounts  charged.  These  cash  payments,  when  posted,  will  close  the 
old  stock  accounts  of  Bonsall  and  Field. 

Receive  $1000  from as  payment  for  stock  issued  to  him. 

(Student's  name) 

— is  to  draw  a  salary  of  $100  a  month  for  managing  the  business.     Bonsall  and 

(Student's  name) 

and  Fields  are  interested  in  other  ventures  which  consume  their  entire  time. 

Ask  for  a  Stock  Record  form  and  keep  in  touch  with  stock  consumed  so  as  to  buy  new  sup- 
plies and  material  just  when  needed. 

The  manufacturing  of  the  company  will  be  restricted  for  the  time  being,  to  building  yacht 
tenders  and  row  boats  as  the  season  is  too  far  advanced  to  make  any  constracts  for  the  delivery 
of  larger  craft  this  season.  For  the  present  season,  the  Manufacturing  will  be  divided  into  two 
departments: — "Yacht  Tender  Department"  and  "Row  Boat  Department." 

A  pair  of  brass  oar  locks  will  be  delivered  with  each  yacht  tender  sold  for  cash;  a  galvanized 
pair  with  each  row  boat  sold  for  cash. 


MONDAY,  JUNE  3rd. 

Fill  a  shop  order  on  stock,  signed  by  Wm 
Yacht  Tender  Dept. 


150  ft.    White  oak, 
400  "     White  cedar, 
200  "     Red  cedar, 
200  L.  ft.  Mahogany  moulding, 
50    "  "         Honduras, 

20  lbs.  Copper  nails, 
10  "     Miscel.  hdwe., 
2  "     Caulking  cotton, 
1  gal.  Spar  varnish, 
5  lbs.  White  lead, 
1  gal.  Linseed  oil, 
4  lbs.  Putty. 


Glenn,  for  the  following  items  :- 

Row  Boat  Dept. 
50  ft.    White  oak, 
400  "     Cypress, 
200  "     Red  cedar, 
40  lbs.  Galv.  nails, 
10  "     Miscel.  hdwe., 
2  "     Caulking  cotton, 

4  "     Putty, 

5  "     White  lead, 
1  gal.  Spar  varnish, 
1  "     Linseed  oil. 


240        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

Buy  2/10,  N/30,  from  Theo.  C.  Ulmer, 

10  gals.  Spar  varnish  @  $2.00 

10  lbs.  Tallow              @  .06 

50  "     Caulking  cotton  @  .10 

Write  up  the  Stock  Record  daily. 

Consign  12  Yacht  tenders  @  $40  each,  to  Gimbel  Bros.,  City,  to  be  sold  on  commission,  on 
our  account  and  risk. 

Sell  1  Yacht  tender  complete  @  $40  for  cash,  to  Howard  P.  Wilson,  Frankford. 

Pay  incorporation  fee,  $46.67;  lawyer's  fee,  $10;  freight  on  incoming  goods,  $1.18. 

Pay  telephone  rental  for  one  month — $4.50,  postage  $4,  water  rent  $12,  printing  and  sta- 
tionery $6. 

WED.,  JUNE  5. 

Sell  for  cash  to  Dr.  Swayne,  1  yacht  tender  complete  @  $40.  Consign  to  John  Wanamaker- 
New  York  City,  to  be  sold  on  our  account  and  risk,  12  yacht  tenders  @  $40,  12  row  boats  @  $8, 
draws  on  account  of  salary,  $25.     Pay  insurance,  one  year,  $30,  taxes  $9, 

(Student's  name) 

ad.  in  Philadelphia  Ledger,  6  weeks  $24. 

SAT.,   JUNE   8. 

Receive  weekly  report  from  Wm.  Glenn.     Work  completed:     4  Yacht  tenders 

12  Row  boats. 
Pay-roll,  Direct  labor,  yacht  tenders  $34,  row  boats  $16. 
Indirect     "  "  "       $12,     "       " 

MON.,  JUNE   10. 

Fill  shop  order  signed  by  the  foreman,  Wm.  Glenn, 


Row  Boat  Dept. 
50  ft.    White  oak 
450  "     Cypress 
250  "     Red  cedar 
6  lbs.  White  lead 
20  "     Galv.  nails 
10  "     Miscel.  hdwe. 
2  "     Caulking  cotton 
1  gal.  Spar  varnish 
1   "     Lindseed  oil 


Yacht  Tender  Dept. 
120  ft.    white  oak 
500  "     White  cedar 
250  "     Red  cedar 
150  L.  ft.  Mahogany  moulding 
50  ft.     Honduras  moulding 
'  6  lbs.  White  lead 
40  "     Copper  nails. 
10  "     Miscel.  Hdwe. 
1  lb.    Caulking  cotton 
1  gal.  Spar  varnish 
1  "     Linseed  Oil. 

Sell  one  row  boat  complete  to  Jas.  Hully  @  $15. 

WED.  JUNE  12. 

Pay  Theo.  C.  Ulmer's  bill  of  5/3,  less  2%  also  the  old  balance  due  this  firm. 

THURS.  JUNE   13. 

Receive  an  Account  Sales  from  Gimbel  Bros.,  showing  our  Net  proceeds  to  be  $425— and  their 
check  for  that  amount. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        241 

FRI.   JUNE    14. 

Buy  of  C.  B.  Coles  &  Sons,  Inc.,  2/10  N/30 
1500  ft.  White  oak  @  .05 
1000  "   Cypress  @  .03 
1000  "   White  Cedar  @  .08 

600  L.  ft.  \  round  \"  Mahogany  Moulding  @  .03 

200  ft.  Honduras  Mahogany  Moulding  @  .15 
Paid  cartage  on  the  above  $4.50,  freight  $8.50. 

SAT.  JUNE  15th. 

Weekly  report  from  foreman,  work  completed,  Yacht  tenders  5,  row  boats,  12. 
.  Pay-roll,   Direct  labor, — tenders  $42,  boats,  $25.50, 
Indirect  "  "         $12,      "  10.00 

MON.  JUNE  17th. 
Fill  shop  order  of  Wm.  Glenn,  foreman: 

Yacht  Tender  Dept. 
800  ft.    White  cedar. 
250  "  "     oak. 

100  "     Red  cedar. 
300  L  ft.  Mahogany  moulding 
50  ft.  "  Honduras 

40  lbs.  Copper  nails. 
40  "     Miscel.  hdwe. 
10  "     White  lead. 
1  lb.    Caulking  cotton 
3  gals.  Spar  varnish. 
1  gal.  Linseed  oil. 

WED.  JUNE  19th. 

Receive  an  account  sales,  from  John  Wanamaker,  New  York  City,  showing  our  net  proceeds 
to  be  $500.40, —  for  tenders  $420,  for  boats  $80.40,  Cashier's  check  for  the  amount  is  enclosed. 
Sell  for  cash  to  Robert  P.  Smith,  one  yacht  tender  complete  @  $40. 

one  row  boat  "  @    15. 

» 

THURS.  JUNE  20th. 

Buy  2/10  N/30  of  Theo  C.  Ulmer,  200  lbs.  Copper  nails  @  .15 

200  "    Galv.        "     @  .05 

48  prs.    "     oar  locks  @  .09 

48  "    Brass  locks  @  .20 

50  lbs.  Miscel.  hdwe.  @  .10 
draws  $5  for  traveling  done  in  the  interests  of  the  business.     Pay 

Student's  name.) 

for  repairs  to  building  $12,  machinery  repairs  $4.     Bought  for  cash,  one  Stilson  wrench,  which 
was  added  to  our  stock  of  tools,  $1.50. 
Write  up  the  stock  record  daily. 


242        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

SAT.  JUNE  22. 

Pay-roll  Direct  labor,  y.  t.  $72.50. 
Indirect    "      "    "    $23.50 
Foreman's  weekly  report.     Work  finished,  10  yacht  tenders. 

MON.  JUNE  24. 
Fill  foreman  Glenn's  material  requisition: 
Yacht  Tender  Dept. 


120  ft.    White  oak, 
200  "     Red  cedar. 
150  L  ft.  Mahogany  Moulding 
"  Honduras 

White  lead. 

Copper  nails. 

Miscel.  hdwe. 

Caulking  cotton. 

Spar  varnish 

Linseed  oil. 


30  ft. 

4  lbs 

40  " 

10  " 

lib. 

1  gal 

i  << 

2 

Row  Boat  Dept. 

30  ft.     White  oak. 

200  "     Red  cedar      . 

400  "     Cypress.  , 

6  lbs.  White  lead. 

40  "     Galv.  nails. 

10  "     Miscel.  hdwe. 

1  lb.    Caulking  cotton. 

1  gal.  Spar  varnish. 
i 

2 


Linseed  oil. 


WED.  JUNE  26. 

Sell  for  cash  yacht  tenders  complete  at  $40  each,  to  the  following: — 

A.  B.  Cartledge,  Wm.  Wolsencroft,  Wm.  Geiger,  Dr.  Pond,  Dr.  Drexler  and  Wm.  Stead. 

THURS.  JUNE  27th. 
Consign  24  row  boats  @  $8,  to  Gimbel  Bros.,  City,  to  be  sold  on  our  account  and  risk. 

FRI.  JUNE  28. 

Sell  for  cash  12  row  boats  complete  @  $8  each,  to  John  Greenlee,  who  has  the  rowing  privilege 
at  Willow  Grove  Park. 

Pay  25(£  for  telegram  to  R.  J.  Bonsall. 

SAT.  JUNE  29. 

Foreman's  weekly  report.     Work  completed,  4  yacht  tenders, — 10  row  boats. 
Pay-roll  Direct  Labor,  yacht  tenders,  $51. — row  boats  $22. — 
Indirect    "          "          "         $12.—  "  "   $10  — 

Pay  Theo.  C.  Ulmer's  bill  of  5/21,  less  discount. 
Credit with  his  salary  for  one  month,  $100. — 

(Student's  name) 

SAT.  JUNE  29. 

Take  a  Trial  Balance  at  this  point.  Figure  and  make  a  list  of  loss  through  depreciation  at 
the  rate  of  1%  on  the  book  value  of  the  following  fixed  assets: — building,  machinery,  moulds  and 
patterns,  tools,  office  fixtures  and  mill  fixtures. 

By  examination  it  is  found  that  5  tons  of  coal  and  12  gals,  of  machine  oil  are  still  on  hand. 

Consulting  the  stock  record,  the  student  will  figure  and  make  a  list  of  the  material  used  for 
the  month  for  constructing  yacht  tenders,  and  a  separate  list  of  material  used  for  row  boat  con- 
struction. Divide  the  amount  used  in  each  case  by  the  number  constructed  to  find  the  average 
material  used  for  each  boat. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.        243 

Figure,  and  make  a  list  of  the  loss  on  the  various  subdivisions  of  General  Expense,  for  the 
month  as  follows: — 

Executive's  Salary,  for  1  month xxx .  xx 

Insurance,  for  1  month  or  1/12  yearly  charge x.xx 

Water,  for  1  month  of  1/12  of  the  yearly  charge x.xx 

Taxes,  for  1  month  or  1/12  of  the  yearly  charge x .  xx 

Legal,  1  /12,-the  figure  being  spread  over  the  first  year.  .     x .  xx 

Postage,  figure  paid  during  the  month x.xx 

Freight,       "        "        "        "        "      xx.xx 

Depreciation,  figure  provided  for  above xx.xx 

Traveling  Exp.,  "     paid  during  the  month x.xx 

Repairs  and  Maintenance,  figure  paid  during  the  month,  xx .  xx 
Telegraph  and  Telephone      "        "        "        "        " 

(1  mo.  rent) x.xx 

Expressage,  figure  paid  during  the  month x.xx 

Printing  and  Stationery,  1  /6  of  6  months'  supply,  con- 
sumed  ! x .  xx 

Cartage,  outlay  for  the  month x .  xx 

Advertising,  2/3  of  figure  paid  for  6  weeks x.xx 

Coal,  3  tons  @  $2.50,  consumed  during  month x.xx 

Machine  oil  4  gals.  @  50^  consumed  during  month x.xx 

Total  General  Expense  for  June xxx .  xx 

Next  find  the  relation  between  "Direct  Labor  on  Yacht  Tenders"  and  "Indirect  Labor"  on 
the  same,  i.  e.,  find  what  percentage  Indirect  Labor  on  Yacht  Tenders  is  of  the  Direct  Labor  on 
Yacht  Tenders.  This  rate  will  be  useful  to  us  in  the  future.  Now  find  what  percentage  General 
Expense  listed  above  is  of  the  Direct  Labor  on  Yacht  Tenders.  This  rate  will  also  be  useful  in 
the  future,  for  instance;  We  have  the  figure  of  direct  labor,  which  can  always  be  taken  from  the 
books,  and  the  amount  of  material  consumed  which  is  easily  extracted  from  the  Stock  Record. 
Let  us  say, — 

Direct  Labor  on  1  yacht  tender  is $5 .  00 

(Found  by  dividing  the  Direct  Labor  on  Yacht 
Tenders  account  by  number  made  during  month.) 

Material  in  1  yacht  tender  is (found  above) 7.50 

Indirect  Labor  (rate  40%)  on . 

1  yacht  tender (     "  "  )   2.00 

Then  the  Factory  cost  is 14.50 

General  Expense  (rate  25%) 

on  1  yacht  tender  is (found  above) 1 .  25 

Then  the  Manufacturing  cost  is 15 .  75 

Therefore,  during  the  next  cost  period,  say,  six  months,  it  will  only  be  necessary  to  know  the 
cost  of  Direct  Labor  and  Material.  With  the  rates  found  we  can  get  both  the  Factory  Cost  and 
the  Manufacturing  Cost. 

What  is  the  percentage  of  Indirect  Labor  on  Yacht  Tenders  to  the  Direct  Labor  on  Yacht 
Tenders? 

What  is  the  percentage  of  Indirect  Labor  on  Row  Boats  to  the  Direct  Labor  on  Row  Boats? 

What  is  the  percentage  of  General  Expense  to  the  Direct  Labor  on  Row  Boats? 

What  is  the  percentage  of  General  Expense  to  the  Direct  Labor  on  Yacht  Tenders? 


244        MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE. 

AUDITING. 

292.  The  Auditor's  Qualifications.  Authorities  unite  in  saying  that  an  exhaustive  knowledge 
of  every  department  of  bookkeeping  is  the  very  basis  of  the  auditor's  qualifications. 

Next  in  importance  is  a  thorough  acquaintance  with  Commercial  Law  and  general  business 
customs,  regulating  the  various  undertakings  in  which  the  auditor  may  be  concerned. 

Added  to  the  foregoing  should  be  a  substantial  knowledge  of  the  especial  manner  in  which 
various  particular  businesses  are  conducted. 

If  the  Auditor  is  working  on  a  corporation  report,  his  knowledge  of  business  should  be  so 
wide  that  he  knows  not  only  what  methods  of  figuring  depreciation  should  be  followed,  but  also 
what  actual  allowances  are  reasonable  in  each  case.  He  must  know,  for  instance  in  shoe  manu- 
facturing, what  rate  of  depreciation  to  allow  on  the  different  sorts  of  shoe  machinery.  In  the 
wholesale  shoe  business  he  must  know  what  allowances  to  make  for  old  stock  on  the  shelves  and 
for  bad  bills.  In  the  retail  shoe  trade,  again,  he  must  know  what  valuations  he  should  use  for 
the  stock  and  for  bad  and  doubtful  book  accounts.  His  knowledge  should  include  all  the  common 
trades,  hardly  any  two  of  which  are  alike.  He  must  see  that  allowances  are  made  for  terminable 
values,  such  as  patents,  leases,  premiums  on  bonds,  copyrights,  etc.  He  must  see  that  provision 
is  made  for  debts  due  in  the  future,  such  as  bonds,  mortgages,  accrued  interest,  rentals,  etc.  He 
must  see  that  certain  costs  charged  to  capital  are  not  too  long  carried  there. 

293.  Auditing  has  come  during  recent  years  to  rank  as  a  profession,  ranking  equally  high 
with  law,  medicine,  engineering  and  the  other  professions.  This  is  just,  because  it  requires  not 
only  a  high  degree  of  intellectual  equipment  and  training,  but  also  a  high  sense  of  honor  and  re- 
sponsibility. Every  part  of  accounting  from  the  merest  clerical  drudgery  to  the  most  shrewd 
financial  engineering  should  be  so  familiar  to  the  auditor  that  he  can  protect  not  only  the  ignorant 
against  the  shrewd,  but  both  against  themselves.  It  is  no  rare  thing  for  an  auditor  to  discover 
and  disclose  in  commercial  affairs,  conditions  of  critical  importance  of  which  the  proprietors  and 
bookkeepers  had  no  inkling. 

Advantages  of  an  audit. 

294.  (1)  Placing  before  the  Board  of  Directors  and  the  public  an  accurate  certified  state- 
ment of  the  company's  present  condition  along  with  the  statement  of  profits  and  losses  showing 
how  this  position  has  been  arrived  at  is  appreciated  in  no  uncertain  measure  by  the  up-to-date 
manager.  This  certified  statement  of  the  business  is  of  the  greatest  convenience  in  the  event  of 
the  Directors  wishing  to  sell  the  business,  dissolve,  or  borrow  money  from  a  bank.  When  bor- 
rowing, the  Balance  Sheet  is  now  almost  always  required  as  a  basis  for  loans.  The  Reserve  banks 
before  rediscounting  paper  invariably  demand  a  certificated  balance  sheet. 

(2)  Many  banks  require  their  customers  and  prospective  borrowers  to  submit  certified 
Balance  Sheets.  The  American  Bankers'  Association  is  in  favor  of  joint  action  by  all  banks, 
requiring  certified  statements  from  all  borrowers.  The  time  when  certified  Balance  Sheets  will  be 
required  is  bound  to  come  as  business  becomes  more  complex. 

(3)  The  up-to-date  purchaser  of  a  business,  now,  requires  a  certified  statement  of  assets 
and  liabilities  and  profits  before  buying.  It  redounds  to  the  benefit  of  both  seller  and  buyer.  The 
seller  receives  a  better  price,  the  certified  statement  being  taken  at  its  face  value.  The  buyer  is 
assured  against  loss,  being  aware  that  a  Certified  Public  Accountant  has  prepared  the  statement. 

(4)  Periodical  preparation  of  reliable  statements  cuts  down  the  risk  of  partnership  disputes 
with  their  accompanying  annoyance  and  expense. 

(5)  While  there  are  no  recorded  decisions  of  the  higher  courts  in  the  United  States  bearing 
upon  the  liability  of  auditors  for  gross  negligence,  the  law  is  very  well  settled  in  England  that 
auditors  are  liable  for  gross  negligence.  Our  courts  would,  in  the  absence  of  American  decisions, 
follow  the  English  decisions.  This  assures  careful  work  on  the  part  of  auditors,  which  redounds 
to  the  benefit  of  American  business  men,  and  at  the  same  time  places  a  correspondingly  higher 
value  upon  the  services  of  the  auditor,  widening  his  field  and  increasing  his  clientele. 


MODERN  BOOKKEEPING,  ACCOUNTING  AND  BUSINESS  PRACTICE.         245 

Instructions,  or  suggestions,  for  an  audit. 

295.  (1)  When  commencing  a  new  audit,  obtain  a  list  of  all  the  books  kept  and  of  all  the 
persons  authorized  to  receive  or  pay  money  and  to  order  goods. 

(2)  In  the  case  of  a  corporation,  examine  the  by-laws  and  board  minutes,  respecting  the 
authorized  receipt  and  payment  of  monies,  the  treatment  of  checks,  notes,  bond  issues,  etc. 

(3)  Note  the  general  system  of  account  keeping.  How  the  correctness  of  payments  is 
vouched  for,  or  checked.     Note  whether  checks  are  used  generally,  or  not. 

(4)  Note  if  the  accounts  and  vouchers  have  been  systematically  checked  and  certified  by 
the  client's  clerks.     Note  any  errors. 

(5)  Compare  the  cancelled  checks  with  the  Check  Book  stub,  or  Check  Register  and  these 
with  the  cash  payments.  Compare  a  portion  of  the  deposit  items  as  entered  in  detail  on  Check 
Book  stubs,  or  elsewhere,  with  the  receipt  side  of  the  Cash  Book  to  find  out  whether  all  items  de- 
posited have  been  properly  entered  in  the  Cash  Book.  Prove  the  reconcilation  of  the  Check  Book 
balance  at  the  end  of  the  period  with  the  Bank  Pass  Book  and  see  that  the  latter  has  been  fre- 
quently balanced  and  examined.     Secure  direct  confirmation  of  the  bank  balance  at  date  of  audit. 

(6)  Note  any  unusual  or  extraordinary  payments  or  receipts. 

(7)  Note  any  unusual  items  concerning  the  payment  of  wages  and  cash. 

(8)  See  that  vouchers  for  all  other  payments  are  kept  and  produced. 

(9)  When  the  concern  includes  branch  houses,  look  into  the  reports,  made  periodically  to 
the  head  office,  governing  income,  operation  expense,  etc. 

(10)  When  examining  the  Purchase  and  Sales  Books,  see  that  they  are  properly  entered  up; 
that  all  the  sales  and  purchases  of  each  department  have  been  reported ;  that  the  invoices  are  prop- 
erly checked  as  to  quantities  and  prices.  Satisfy  yourself  that  every  liability  of  the  year  has  been 
brought  into  the  accounts. 

(11)  Check,  or  test,  the  posting  in  the  Individual  Ledgers  from  the  Cash  Book  and  a  part 
of  these  Ledgers  with  all  of  the  auxiliary  books. 

(12)  Check  all  the  posting  in  the  Private  or  General  Ledger. 

(13)  Examine  and  test  the  journalizing. 

(14)  Examine  critically  the  Notes  Receivable  and  Notes  Payable  Books;  scrutinize  all  past 
due,  renewed,  and  protested,  commercial  paper,  making  a  list  of  same  along  with  any  collateral 
security. 

(15)  Examine  the  entries  and  transfers  posted  through  the  journal.  Check  the  postings. 
The  auditor  is  not  held  responsible  for  the  details  of  classification,  yet  it  is  desirable  that  sugges- 
tions for  improvement  be  made  where  needed,  especially  in  relation  to  the  division  of  charges  be- 
tween the  capital  and  revenue  accounts. 

(16)  Examine  Mortgages  and  Bonds  accounts. 

(17)  In  reference  to  stock  taking,  see  that  all  stock  sheets  are  signed  by  heads  of  depart- 
ments, and  that  totals  of  same  are  correctly  carried  forward  to  the  general  inventory.  See  that 
goods  finished  and  in  process  are  inventoried  at  cost  price  or  at  present  market  value  if  that  is 
lower  than  cost. 

(18)  When  checking  the  Profit  and  Loss  account,  see  that  the  usual  and  proper  deductions 
have  been  made  for  wear  and  tear  and  depreciation. 

(19)  See  that  no  expenditure  is  capitalized  without  the  authority  of  a  responsible  person. 

(20)  See  that  the  proper  distinction  has  been  made  between  new  construction  and  mere 
replacements. 

(21)  Ascertain  the  correctness  of  the  cash  balance,  and  of  the  promissory  notes,  acceptances 
and  securities  on  hand.     Note  any  items  or  memoranda  carried  as  such. 

(22)  Use  a  separate  Memoranda  Book  or  sheet  for  each  class  of  errors. 


Directory 


Abell,  A.  S.  &  Co.,  Calvert  and  Saratoga  Sts. 
Abel,  Louis,  873  N.  6th  St. 
Adams,  L.  F.,  762  Ridge  Ave. 
Adams,  J.  R.  M.,  324  Girard  Ave. 
Adams,  John  W,  1027  Vine  St. 
Albert,  Francis,  &  Co.,  1006  Arch  St. 
Alt,  Caspar,  2041  N.  Bodine  St. 
Anderson  &  Ireland,  111-115  Light  St. 
Andrae,  Wm,  413  N.  4th  St. 
Andrews,  L.  J.,  Bethlehem,  Md. 
Armour  &  Co.,  P.  D.,  Chicago,  111. 
Arnold  &  Company,  5th  and  Allegheny  Ave. 
Auginbaugh,  D.  C,  &  Son,  8th  and  Morris 
Sts. 

Baily  Bros.  &  Raub,  Lancaster,  Pa. 

Baily,  Jas.,  &  Son,  301  Cambria  St. 

Bailey,  J.  C,  Woodstock,  Va. 

Bailey,  John  T.,  2040  N.  2nd  St. 

Baker  &  Co.,  Staunton,  Va. 

Baker,  Fred.,  Fisher  Hill,  Va. 

Baker,  Geo.  W.,  300  N.  35th  St. 

Baldwin  &  Co.,  Philadelphia,  Pa. 

Baltimore  Bargain  House,  Baltimore,  Md. 

Baltimore  Drayage  Co.,  Baltimore,  Md. 

Baltimore  Machine  Co.,  Ill  S.  Race  St. 

Baltimore  Transfer  Co.,  109  E.  Lombard  St. 

Baltimore  Hdwe.  Co.,  Baltimore,  Md. 

Baltimore  Waste  Co.,  Baltimore,  Md. 

Barbour,  James  &  Son,  Washington,  D.  C. 

Barrett,  J.  B.,  1903  S.  20th  St. 

Bates,  Jas.,  1430  Ridge  Ave. 

Bauserman,  M.  L.,  &  Co.,  Harrisonburg,  Va. 

Beall,  Jas.,  1938  N.  23rd  St. 

Bear,  Oscar,  148  Chew  St. 

Beall,  Frank  &  Co.,  Hancock,  Md. 

Beck,  Fred  &  Co.,  725  N.  27th  St. 

Becker  &  Anderson,  1705  S.  7th  St. 

Bill  &  Sunderland,  Ocean  City,  Md. 

Bloom  S.  N.  &  Co.,  Hagerstown,  Md. 

Bowers,  Geo.,  Martinsburg,  W.  Va. 

Boyer  &  Co.,  114  German  St. 

Bowman,  J.  H.,  Hanover,  Pa. 

Brady,  Jas.,  1721  Hunting  Park  Ave. 

Bronson,  J.  M.,  45  W.  Chelten  Ave. 


Brooke,  Chas.  H.,  1420  Locust  St. 
Brooke,  Henry,  4th  and  Walnut  Sts. 
Brooks,  Chas.,  1307  Girard  Ave. 
Brown,  Alfred,  1915  Orthodox  St. 
Brown  Bros.,  Providence,  R.  I. 
Brown,  Geo.,  617  Cherry  St. 
Brown,  John  &  Sons,  19  S.  34th  St. 
Brown,  Mary,  1324  Pine  St. 
Brown,  Thos.,  919  N.  42nd  St. 
Brown  &  Clark,  24th  and  Locust  Sts. 
Brown,  Oliver,  1206  N.  47th  St. 
Bruce,  O.  J.,  1440  Louden  St. 
Bryant  &  Clarvoe,  2801  N.  Lee  St. 
Burriss,  E.  L.,  1509  Tiogo  St. 
Burrows,  Oscar,  740  Carpenter  St. 

Carver,  John,  1307  Diamond  St. 
Carpenter,  Thos.,  2042  Chestnut  St. 
Carpenter,  Thos.  G.,  822  S.  20th  St. 
Carter,  Chas.,  Martinsburg,  W.  Va. 
Cedar  Rapids  Furniture  Co.,  Cedar  Rapids, 

Iowa. 
Central  Pa.  Supply  Co.,  York,  Pa. 
Charlottesville  Woolen  Mills,  Charlottesville, 

Va. 
Chicago  Stamping  Co.,  Chicago. 
Claflin  Co.,  New  York  City,  N.  Y. 
Clark,  J.  F.,  Salisbury,  Md. 
Cochrane,  A.  B.  &  Co.,  515  Commerce  St. 
Cole,  W.  H.  &  Son,  918  Filbert  St. 
Cole,  Wm.  &  Sons,  522  Commerce  St. 
Coles,  C.  B.  &  Sons,  Inc.,  Front  St.  below 

Kaighn  Ave. 
Constantine,  J.  A.,  Sunbury,  Pa. 
Constantine,  J.  H.,  1718  Vine  St. 
Consolidated  Gas  Co.,  418  Main  St. 
Crabill,  D.  M.,  3403  Baring  St. 
Craig,  John,  87  Fairmount  Ave. 
Cranwell,  Thos.  G.  &  Co.,  120  S.  Delaware  Ave. 
Crawford  Woolen  Mill  Co.,  5215  Wissahickon 

Ave. 
Crawford,  Geo.,  909  S.  47th  St. 
Cross,  F.  L.,  810  Walnut  St. 
Crowl,  Pearre  E.  &  Co.,  16  S.  5th  St. 
Crum,  C.  B.,  Meadow  Mills,  Va. 


246 


DIRECTORY. 


247 


Cumberland  Hdwe.  Co.,  Cumberland,  Md. 
Cumberland  Paper  Co.,  Cumberland,  Md. 
Cushing  &  Co.,  845  Walnut  St. 

Davidson  F.  H.  &  Co.,  Charlottesville,  Va. 

Davis,  S.  S.,  8th  &  Porter  Sts. 

Davis  Bros.,  29th  and  Bristol  Sts. 

Dennison,  Sarah,  5528  Greene  St. 

Dewy,  Robt.,  1432  Diamond  St. 

Diamond  State  Iron  Co.,  Real  Estate  Trust 

Bldg. 
Diffendall,  Chas.  &  Co.,  Berwick,  Pa. 
Dill,  Win.  H.,  1422  S.  52nd  St. 
Dillon  &  Co.,  Columbia,  Pa. 
Disston's,  Henry,  Sons,  Tacony,  Pa. 
Doan  &  Carter,  127  S.  4th  St. 
Doub,  Louis  P.,  125  W.  Mt.  Airy  St. 
Double  &  Co.,  1015  Columbia  Ave. 
Dulany,  Wm.  C,  918  Chestnut  St. 
Durant,  L.  B.,  228  S.  19th  St. 

Ealdman  &  Co.,  Baltimore,  Md. 
Earp,  Samuel  H.,  Elkridge,  Md. 
Edmondson,  J.  A.  &  Son,  108  Hanover  St. 
Elder,  Samuel,  508  E.  Allegheny  Ave. 
Elliott  Bros.,  3rd  and  Chestnut  Sts. 
Emmert,  Samuel,  Concord,  N.  C. 
Emerson,  J.  R.,  Hdwe.  Co.,  Frederick,  Md. 
Enterprise  Furniture  Co.,  452  N.  Howard  St. 
Evans,  Geo.,  1032  Walnut  St. 
Excelsior  Mfg.  Co.,  203  Quarry  St. 

Finch,  Thomas,  &  Son,  22  S.  52nd  St. 

Fore,  Jefferson  D.,  142  N.  11th  St. 

Forman,  Ezekiel,  2665  E.  Huntingdon  St. 

Fosnot,  H.  J.,  York,  Pa. 

Frames,  Jas.  P.  &  Son,  1825  Tiogo  St. 

Frantz,  J.  N.,  Hancock,  Va. 

Frazier  &  Bishop,  Martinsburg,  W.  Va. 

Friday,  J.  B.,  &  Co.,  Danville,  Va. 

Friedenwald  Co.,  1313  Cherry  St. 

Gable,  John,  Williamsport,  Pa. 
Gallup,  W.  A.,  310  E.  Somerset  St. 
Gambrill,  C.  A.,  Mgf.  Co.,  14  E.  German  St., 

Baltimore,  Md. 
Gilbert  Bros.,  Baltimore,  Md. 
Gilpin,  Langdon  &  Co.,  393  Spruce  St* 
Gilpin,  Wm.  C,  Duncannon,  Pa. 


Gimbell  Bros.,  Phila.,  Pa. 

Glassman,  John,  Hagerstown,  Md. 

Globe- Wernicke  Co.,  1018  Chestnut  St.,  Phila. 

Gold  Bros.,  323  W.  Saratoga  St. 

Goodwin,  James,  4713  Cedar  Ave. 

Goodwin,  Thos.  F.,  Glyndon,  Md. 

Gray  &  Straight,  51st  &  Ogden  St. 

Green,  A.  H.,  1018  Pine  St. 

Grove,  F.  C,  Stephenson,  Va. 

Guthbert,  L.  R.,  8  N.  13th  St. 

Halderman,  J.  D.,  Kernstown,  Va. 

Hall,  Headington  &  Co.,  Charles  and  Lexing- 
ton Sts. 

Hall,  Atkinson  &  Co.,  35th  and  Queen  Lane, 
Phila. 

Haltman,  Frank,  1713  Pine  St. 

Hance  Bros.  &  Wight,  623  CallowhHl  St. 

Handley,  Albert,  436  N.  Broad  St. 

Harris,  John,  5420  N.  12th  St.,  Phila. 

Harris,  Mrs.  John,  917  Diamond  St. 

Harrison,  Thos.,  Lake  View,  Md. 

Hartwell  Furniture  Co.,  Cincinnati,  Ohio. 

Hayes  &  Nurff,  Atlanta,  Ga. 

Hauser,  Paul,  271  S.  12th  St. 

Hazard,  John,  Shepherdstown,  W.  Va. 

Henderson,  Green  &  Co.,  842  Germantown 
Ave.,  Phila. 

Henderson  &  Latham,  839  Market  St. 

Heckerman  &  Son.,  4915  Lancaster  Ave., 
Phila. 

Hensell,  David,  C,  1333  N.  33rd  St.,  Phila. 

Higgs  Commission  Co., -Chicago,  111. 

Hight,  Samuel,  Front  Royal,  Va. 

Himmel  &  Co.,  1702  Market  St. 

Hopkins,  John,  Oil  Co.,  54  N.  13th  St. 

Howell,  Jas.  R.,  5508  N.  Fairhill  St.,  Phila. 

Hottle  &  Smith,  Alexandria,  Va. 

Housel,  J.  L.,  5218  Master  St. 

Hurth,  John  &  Co.,  1800  Ridge  Ave. 

Hurst,  J.  E.,  &  Co.,  Denckla  Bldg.,  Phila. 

Independent  Ice  Co. 

International  Creditors  Association,  St.  Louis, 
Mo. 

Jackson,  James,  727  Walnut  St.,  Phila.,  Pa. 
Jackson,   Wm.,  217  E.  Baltimore  St.,  Balti- 
more, Md. 


248 


DIRECTORY 


Jarrett,  J.  P.,  Strasburg,  Va. 

Jenkins,  F.,  Hillensburg,  N.  C. 

Johnson,  F.  W.,  400  N.  53rd  St.,  Phila.,  Pa. 

Johnson,  L.  W.,  Baltimore,  Md. 

Jones,  Edward,  5009  Hazel  Ave. 

Jones,  Frank,  1518  Harrison  St.,  Phila.,  Pa. 

Jones,  Harry,  1310  N.  52nd  St.,  Phila.,  Pa. 

Jones,  John,  710  S.  13th  St. 

Jones,  Robinson  &  Co.,  Brunswick,  Md. 

Jones,  Robt.,  Columbia,  S.  C. 

Jones,  Samuel,  173  Maplewood  Ave.,  Phila., 

Pa. 
Jordan  Stabler  &  Co.,  318  N.  Charles  St. 

Katz  Bros.,  729  Sansom  St.,  Phila.,  Pa. 
Keidel,  Henry  Co.,  234  Commerce  St. 
Keller,  Geo.,  Winchester,  Va. 
Kennedy,  .Samuel,  Cherry  Run,  Md. 
Keystone  Hdwe.  Co.,  Bedford,  Pa. 
Kreamer,  C.  P.,  2614  Van  Dyke  St.,  Phila.,  Pa. 

Lake,  James,  6037  Carpenter  St.,  Phila.,  Pa. 
Lange,  John,  4230  N.  8th  St.,  Phila.,  Pa. 
Lea,  William,  &  Sons,  434  Walnut  St.,  Phila., 

Pa. 
Lampe,  Christian,  Frederick,  Md. 
Lewis,  Albert,  1817  Columbia  Ave.,  Phila,  Pa. 
Lindamuth  &  Co.,  Emmitsburg,  Md. 
Long,  John  J.,  Emmitsburg,  Md. 
Lower,  James,  318  N.  41st  St. 
Long,  R.  A.,  Beadford,  S.  C. 
Lyons,  J.  W.,  1004  Arch  St.,  Phila.,  Pa. 

McClung,  S.  B.,  Upper  Tract,  W.  Va. 
McGaw  &  Co.,  906  S.  21st  St.,  Baltimore,  Md. 
McGee,  W.  A.,  Hanover,  Pa. 
McKay  Engineering  Co.,  604  Arch  St. 
McVeigh,  J.  H.  &  Co.,  243  E.  Cambria  St. 
Maloney  &  Carter,  Charlotte,  N.  C. 
Mann  Axe  Co.,  Lewistown,  Pa. 
Marriott,  Telfair  W.,  8  S.  40th  St. 
Marshall  Field  &  Co.,  Chicago,  111. 
Marshall,  James,  415  Locust  St. 
Marshall,  Wescoat  &  Co.,  Columbia,  S.  C. 
Maryland  Fire  Insurance  Co.,  Baltimore,  Md. 
Maryland  Telephone  Co.,  Lexington,  Corner 

Courtland  St. 
Maynadier  &  Co.,  144  N.  Howard  St. 
Maryland  Hinge  Co.,  Baltimore,  Md. 


Maryland  Milling  Co.,  Hagerstown,  Md. 
Maynard,  Daniel  L.,  528  N.  18th  St. 
Meadows,  L.  N.,  10th  and  Green  Sts. 
Meyers,  Frank,  100  Chestnut  St.,  Phila.,  Pa. 
Miles  Hdwe.  Co.,  1213  Filbert  St.,  Phila.,  Pa. 
Miller,  Daniel  &  Co.,  Baltimore,  Md. 
Miller  Hardware  Co.,  Atlanta,  Ga. 
Miller  &  Hartman,  Lancaster,  Pa. 
Miller  Supply  Co.,  Winchester,  Va. 
Miller  &  Davis,  2066  Ridge  Ave.,  Phila.,  Pa. 
Miller  &  Shower,  217  N.  3rd  St. 
Miller  Safe  &  Lock  Co.,  Baltimore,  Md. 
Miller  &  Son,  5300  Westminster  Ave.,  Phila., 

Pa. 
Mitchell,  Addison  G.,  918  Walnut  St. 
Mitchell,  Charles  F.,  382  S.  15th  St. 
Morgan,  J.  P.,  504  Chestnut  St. 
Moore,  Jos.  W.  &  Co.,  1629  S.  20th  St. 
Murdock  Commission  Co.,   Boston,  Mass. 
Murphy,  George,  2650  Bridge  St.,  Phila.,  Pa. 
Murphy,  P.,  329  S.  3rd  St. 
Muth  Bros.  &  Co.,  Baltimore,  Md. 
Myers,  C.  P.,  7th  and  Reed  Sts.,  Phila.,  Pa. 

National  Biscuit  Co.,  1301  Glenwood  Ave. 
National  Drug  Co.,  4677  Stenton  Ave. 
National  Machine  Co.,  1323  Arch  St. 
National  Paper  Co.,  New  York  City. 
National  Tool  &  Stamping  Co.,  Harrisburg,  Pa. 
Nicodemus,  N.  A.,  Edgemont,  Md. 
New  England  Cutlery  Co.,  New  Haven,  Conn. 
Nogood  &  Bro.,  Creditville,  Pa. 
Norwood,  J.  F.,  1722  Green  St. 

Oldershaw  &  Son,  1018  W.  York  St. 
O'Rear,  W.  A.,  Clear  Brook,  Va. 
Ortel,  Wm,  1523  Snyder  Ave. 

Palmer,  Edward  L.,  &  Co.,  Baltimore,  Md. 
Parker,  W.  J.,  &  Co.,  514  Commerce  St. 
Parsons  &  Co.,  761  N.  25th  St. 
Parsons  Paper  Co.,  Holyoke,  Mass. 
Parsons,  Mrs.  T.  W.,  4654  Penn  Ave. 
Pearson,  J.  F.,  &  Co.,  Baltimore,  Md. 
Perfection   Mattress   Co.,    1930   Market   St., 

Phila. 
Pilson,  A.  O.,  5105  Ridge  Ave. 
Pitcher,  C.  S.,  &  Co.,  Newton,  N.  C.  ' 
Poltz,  R.  P.,  2765  N.  26th  St. 


DIRECTORY 


249 


Powell,  John  D.,  4634  Oakland  St. 
Purcell,  Jos.  L.,  2646  S.  17th  St. 
Pursey,  C.  C,  &  Co.,  Richmond,  Va. 
Pughsley,  Frank,  314  W.  Franklin  St. 

Radcliffe,  S.  J.,  &  Son,  Ellicott  City,  Md. 
Ramsburg  &  Co.,  Frederick,  Md. 
Reed,  J.  B.,  2034  Locust  St. 
Reese,  Percy  M.,  1115  N.  Charles  St. 
Reily  Bros.  &  Raub.,  740  S.  20th  St. 
Reitz  Bros.,  416  W.  Lexington  St. 
Reist,  Frank,  York,  Pa. 
Ridgeway,  C.  P.,  Ridgeway,  W.  Va. 
Riley,  W.  F.,  1819  N.  26th  St. 
Rivers  Furniture  Co.,  612  Market  St. 
Robinson,  D.  A.,  Brucetown,  Va. 
Robinson,  James  &  Co.,  Vineland,  N.  J. 
Robinson,  Oliver  P.,  541  S.  52nd  St. 
Roderick,  C.  N.,  2420  N.  6th  St. 
Rose,  Robert,  412  S.  50th  St. 
Ross,  Robert,  31st  and  Morris  St. 
Rosenberg,  J.,  420  Market  St. 
Roth,  George,  325  S.  52nd  St. 
Russell,  John  W.,  3547  Germantown  Ave. 


Snare  &  Miley,  15th  and  Louden  St. 
Snyder  &  Co.,  350  W.  Mulberry  St. 
Standard  Oil  Co.,  Phila.,  Pa. 
Starrell,  C.  A.,  &  Co.,  Chicago,  111. 
Steiner,  Edw.,  &  Co.,  Hagerstown,  Md. 
Stevenson  &  Harmanson,  1134  Girard  Ave. 
Stewart,  Henry  A.,  272  N.  23d  St. 
Stewart,  Wm.,  2566  E.  Norris  St. 
Stickley  Milling  Co.,  612  Chestnut  St. 
Stinson,  Edw.  &  Co..  940  Race  St. 
Stone,  R.  W.,  149  N.  9th  St. 
Stotlemeyer,  James,  1614  W.  Erie  Ave. 
Stotlemeyer,  John  D.,  54th  and  Race  St. 
Studebaker  Mfg.  Co.,  South  Bend,  Ind. 

Terrill,  G.  H.,  519  E.  Washington  Lane. 
Tielman,  Otto  &  Son,  Columbus,  S.  C. 
Thomas,  George  P.,  1144  Huntingdon  St. 
Thomas,  J.  D.,  705  N.  2nd  St. 
Traverse,  Robt.  E.,  6013  Market  St. 
Trout,  W.  W.  &  Co.,  Norfolk,  W.  Va. 
Turnbull  &  Norris,  1512  Chestnut  St. 
Turner  &  Son,  Betterton,  Md. 
Turner,  Spencer  J.,  New  York. 


Sanders,  M.,  1423  West  St. 

Sampson,  S.  T.,  Richville,  Pa. 

Saum,  Charles,  1404  S.  3rd  St, 

Schmeilt,  M.  B.,  849  N.  10th  St. 

Schmidt,  Henry,  226  N.  7th  St. 

Schoenewolf  &  Co.,  406  Commerce  St. 

Schriver,  Bentley  &  Co.,  206  W.  German  St. 

Sears,  Charles,  1728  N.  19th  St. 

Seigel,  D.  &  Co.,  Easton,  Md. 

Sellers,  John,  710  Sansom  St. 

Sharpe  &  Dohme,  510  Arch  St.,  Phila. 

Shackman  &  Loewy,  113  York  St. 

Sherman,  Walter  L.,  158  Dauphin  St. 

Shull,  E.  C,  Columbia,  S.  C. 

Silberman  &  Todes,  1222  N.  Mascher  St. 

Singer,  John  D.,  16th  and  Brown  St. 

Sloan,  Frank  B.,  421  Arch  St. 

Sloan,  Frank  N.,  &  Co.,  Baltimore,  Md. 

Smith,  J.  P.,  1734  S.  4th  St. 

Smith  Bros.  &  Co.,  3268  Joy  St. 

Smith,  F.  M.,  905  Walnut  St. 

Smith,  Dixon  &  Co.,  Baltimore,  Md. 

Smith,  Z.  L.,  Bluefield,  W.  Va. 


Ulmer,  Theodore  C,  Richmond  Street  and  E. 

Columbia  Ave. 
Union  Hardware  Co.,  Union,  S.  C. 

Vulcan  Iron  Works,  Steelton^  Pa. 

Wagner  &  Johnson,  Charleston,  S.  C. 
Wagner,  F.  W.  &  Co.,  Raleigh,  N.  C. 
Wagner,  Willis  &'  Co.,  427  Chestnut  St. 
Walburn,  C,  &  Co.,  Charleston,  S.  C. 
Wall,  W.  W.,  Winchester,  Va. 
Walters,  Samuel  L.,  520  N.  18th  St. 
Wanamaker,  John,  Phila.,  Pa. 
Waream,  J.  S.,  1011  Chestnut  St. 
Washburn  Flour  Mills  Co.,  Minneapolis, 

Minn. 
West,  W.  S.,  411  Walnut  St. 
West,  Robt.,  1013  S.  17th  St. 
Weston  Paper  Co.,  Davis,  W.  Va. 
Wilcox  Hdwe,  &  Iron  Co.,  Gettysburg,  Pa. 
Williams  &  Wilkins  Co.,   2419  Greenmount 

Ave. 
Williamson  Creamery  Co.,  Williamson,  Pa. 


250 


DIRECTORY. 


Wilson,  A.,  Bethesda,  Md. 
Wilson,  Chas.,  Emmittsburg,  Md. 
Wilson  Furniture  Co.,  1925  Arch  St. 
Wilson,  Howard  P.,  Frankford,  Pa. 
Wilson,  William,  1517  N.  56th  St. 
Winkleman  Brown  Drug  Co.,  Pittsburgh,  Pa. 
Woolson  Spice  Co.,  Toledo,  O. 
World  Publishing  Co.,  208  N.  Calvert  St. 
Wright,  Samuel,  719  S.  58th  St. 


Wyeth    Bros.,    11th    and    Washington    Ave., 
Phila. 

Yakel,  Geo.  &  Co.,  Charleston,  S.  C. 
Yearley,  Alex.,  &  Co.,  338  W.  Logan  St. 
Young  Bros.,  Danville,  Va. 
Young,  H.  O.,  105  Walnut  St. 

Zimmerman,  T.  E.,  &  Co.,  2501  N.  33d  St. 


Index 

PAGE 

Acceptance 92 

Acceptance,  Trade 93 

Account  Sales 198 

Account  Sales,  Illustration 199 

Account,  Sales  on 114 

Account  with  Attorney  — ' 136 

Accounts,  arrangement  in  Ledger 113 

Accounts,  Controlling 167 

Accounts  Payable  account 168 

Accounts  Receivable  account 167 

Advances  to  Consignor 198 

Advertising  account 71 

Arrangement  of  accounts  in  Ledger 113 

Assets, 

Available. 232 

Deferred .- 234 

Fixed 232 

Attorney,  account  with 136 

Audit,  advantages  of 244 

Auditing 244 

Audit,  Suggestions  for 245 

Auditor,  Qualifications  for 244 

Automobile  account 26 

Auxiliary  books 113 

Available  Assets 232 

Balance  Sheet 72 

Illustration 73 

Balance  Sheets 232 

Illustration ' 233 

Bank  Account,  How  to  Open 19 

Bank  Account  in  Ledger 174 

Bank  Balance,  Reconciliation  of 21 

Bank  Book  Balance 21 

Bank  Drafts 18 

Basis  of  Cost  Accounting 236 

Bill  Book  as  Book  of  Original  Entry t 168 

Bill  Book :....' 96 

Illustration 98-101 

Bills  or  Invoices 33' 

Bills  Payable  account 95 

When  to  Debit 96 

When  to  Credit 95 

When  the  First  Entry  Should  Be  in  the  Journal 96 

When  the  First  Entry  Should  Be  in  the  Cash  Book 96 

251 


ARTICLE 

76 

231 

110 
162 
104 

190-196 
195 

190-194 
226 
60 
104 

278 
279 
277 
162 
294 

292-295 
295 
2°2 
37 
103 
278 

69 

275-281 

18 
197 

20 

20 

16 
285 
196 

97 

44 

88-89 

92 

90-91 

93 

94 


252 INDEX 

PAGE  ARTICLE 

Bills  Payable  account,  Illustration 106 

Bills  Payable  and  Bills  Receivable,  How  to  Distinguish 92  77 

Bills  Receivable  account 94-95  80-87 

When  the  First  Entry  Should  Be  in  the  Journal 96  93 

When  the  First  Entry  Should  Be  in  the  Cash  Book 96  94 

Bills  Receivable  account,  Illustration 106 

Bills  Receivable  account 

Instructions  for  studying  illustration 97  99 

Bills  Receivable  account 94  80-87 

When  to  Debit 94  82-83 

When  to  Credit 94  84-85 

Bonus  Stock 212  242 

Bookkeeping,  Double  Entry,  Rules  for -.     29      .        39-40 

Books,  Classification  of  Books 113  100 

Of  Original  Entry 113  101 

Of  Subsequent  Entry 113  102 

Auxiliary 113  103 

Books,  How  to  Open 55  50 

Opening  Journal  Entry  Illustrated 59 

Books,  How  to  Close 69  54-68 

Capital  Stock  account 210  236-246 

Capital  Stock  Increased 211  239 

Capital  Stock,  Paid  for  in  Installments 211  240 

Sold  below  Par 212      •      241 

Cash, 

What  is  cash 5  7 

How  to  find  amount  on  hand 5  8 

Daily  Proof  of 14  13 

Excess 14  13 

Deficiency 14  13 

Drawn  on  account  by  employes 136  160 

Account  with,  in  the  Ledger 136  163 

Cash  Account, 

When  to  Debit  and  When  to  Credit 5  4 

Usual  Explanations : 5  6 

Cash  Book,  Petty 131  134 

Cash  Book,  Three-column 118  115-119 

Illustration 120-121 

Cash  Discount  or  Merchandise  Discount 114  109 

Cash  Discount  on  Purchases  account ' '. 131  135-137 

Cash  Discount  on  Sales  account 132  142 

Certified  Public  Accountants 213  249 

Changing  from  Single  Entry  to  Double  Entry 194  215-216 

Checks 16  14 

Checks,  Writing  of 22  21 

Check  Book  Stub  Records 21  19 

Classificat'on  of  Books 113  100 


INDEX 


253 


PAGE  ARTICLE 

Closing  Books 70      %        56-68 

Illustration  of  Journal  Closing  Entries 75 

How  Often  Done 72  67 

Collateral  note 89  71 

Collections,  Importance  of 36  47 

How  to  Make 36  47 

Columnar  Books 118  114 

Columnar  Cash  Book 118  115-119 

Illustration 148  165-178 

Commission  Account .  . 198  232 

Commission  Bookkeeping 196  218-235 

Common  Stock 212  243 

Consignments 197  222-234 

Consignment  Ledger 197  224 

Controlling  Accounts 167  190-196 

Corporation  Bookkeeping * 210-215     236-265 

Correction  of  Errors 32  43 

Cost  Accounting 236  282-291 

Cost  Accounting,  Rate  Calculations 237  288-281 

Cost  by  Per  Cent  Method 236  282-287 

Creditors'  Ledger 167  189 

Customers'  Ledger 167  189 

Daily  Proof  of  Cash 14  13 

Day  Book  or  Journal,  use  of 31  42 

Deferred  Assets 234  279 

Deficiency 234  280 

Deposit  Ticket '. 19  18 

Directory 246 

Discount,  Trade 157  181-184 

Cash 114  109 

Merchandise 114  109 

Bank 

On  Sales 132  142 

On  Purchases 131  135-137 

Dividend  Account 214  256 

Dividend  Book : .' 215  265 

Donated  Stock 213  250-252 

Double  Entry,  Advantages  of " 194  214 

Double  Entry  Bookkeeping,  Rules  for 29  39-40 

Drafts 17 

Sight.. -  18  15 

Bank." 18  16 

Time 92  76 

Parties  to 17  15 

Presentation  of 92  76 

Acceptance  of 92  76 

Protest  of 92  76 


256 INDEX 

PAGE  ARTICLE 

Manufacturing  Statement 229  274 

Illustration : 230-232 

Merchandise  Account 

Closing  of 69  55-56 

Illustration  of  Journal  Closing  Entry 75 

Illustration  of  Merchandise  Account  Closed 77 

Merchandise  Account 26  35 

When  to  Debit  and  When  to  Credit 26  35 

How  to  Find  Loss  or  Gain  on .... 26  36 

Illustrations  of  Merchandise  Account 45-77 

Merchandise  Account,  Subdivision  of 131  135 

Merchandise  Discount  or  Cash  Discount 114  109 

Merchandise  Purchases  Account 132  137 

Merchandise  Sales  Account 132  141-142 

Minute  Book 214  261 

Money  Drawn  on  Account  by  Employee 136  160 

Money  Orders, 

Post  Office .  18  17 

Express 18  17 

Monthly  Statement 34  45 

Illustration , 35 

Net  Investment 55  50 

Net  Proceeds 198  233 

Non-Productive  Labor 237  290 

Notes,  Promissory 89  70 

Joint  and  Several  Notes 89  71 

Collateral  Note 89  71 

Judgment  Note 89  71 

With  Demand,  Notice  and  Protest  Waived. -r 89  71 

Illustrations 90-91 

When  Due 89  73 

Protest  for  Non-Payment 89  75 

Counting  Time  for  Discount 89  74 

Entries  if  Renewed 95-96        86-95 

Entries  for  Part  Payment 95  87 

Opening  a  Bank  account 19  18 

Opening  Books 55  50 

Preliminary  Statement 55  50 

Journal  Entry  for,  Illustrated 59 

Opening  Books  by  Single  Entry 193  210-21 

Opening  Entries  for  Corporation  Bookkeeping 211-212     237-246 

Original  Entry,  Books  of 113  101 

Partners, 

General  or  Ostensible 133  147 

Dormant  or  Secret 133  147 

Special 133  147 

Nominal 133  147 


INDEX 257 

PAGE  ARTICLE 

Partnership, 

Forming 133  146 

Outline  of  Agreement 133  149 

Patents 213  247 

Pencil  Figures 69  54 

Personal  Accounts, 

Closing  of 71  65 

Personal  Accounts 24  29 

When  to  Debit 24  30 

When  to  Credit 24  31 

Illustration 46-49 

Petty  Cash * 131  134 

Posting 30  41 

Posting,  Junior  Clerks'  Assistance 114  106 

Post  Office  Money  Orders 18  17 

Preferred  Stock 212  243 

Preliminary  Statement  for  Opening  Books 55  50 

Private  Accounts, 

Closing  of 71  65 

Illustration  of  Journal  Closing  Entry 75 

Illustration  of  Private  Account  Closed 76 

Private  Accounts, 

When  to  Debit  and  When  to  Credit 67  53 

Illustration 76 

Private  Ledger 167  189 

Productive  Labor .' ' 237  289 

Profit  and  Loss  Statement,  Form  of 225 

Profit  and  Loss  Statement 225  273 

Illustration ' 226-227 

Promissory  Note 89  70 

Protest  for  Non-Payment 89  75 

Illustrations 90-91 

Property  Account ; 25  33 

WThen  to  Debit  and  When  to  Credit 25  34 

Purchase  Ledger 167  189 

Purchases  Returned  Account 131  135-138 

Real  Estate  Account 158  185-186 

Receipts • 23  28 

Receiving  Book 197  223 

Reconciliation  of  Bank  Balance 21  20 

Red  Ink,  When  Used 72  68    • 

Resources 55  50 

Rent  Account 71  60 

Ruling,  Instruction  in . 7  12 

Statement,  Monthly 34  45 

Use  of • 34  45 

Illustrations '. 35 


258 INDEX. 

PAGE  ARTICLE 

Sets, 

Number    1 114 

"         2 *.... 119 

3 135 

"         4 " 149 

5 * 158 

6 168 

"         7 174 

8 183 

9 ■*. '. 200 

10 217 

Store  and  Office  Fixtures  Account 26              37 

When  to  Debit  and  When  to  Credit ^  .  .  26              37 

Illustrations  of  Store  and  Office  Fixtures  Account 45 

Teams  and  Wagons  Account 26  37 

Tests, 

Number    1 - , , 7 

2 27 

"         3 , 36 

4.. 56 

5 74 

6 88 

7 97 

"         8 112 

9 •....: 117 

10 126 

11 145 

"       12 157 

"       13 166 

14. 173 

15 182 

"       16 ' ." 191 

"       17 195 

Trade  Acceptance 93 

Trial  Balances 32  43 

Errors,  How  to  Find 54  49 

Illustration 50 

Undivided  Profits  Account 214  255-258 

Unissued  Stock  Account 211  238 

Voucher  Book * 215  267 

Voucher  Book,  Illustrated 216 

Voucher  Register 217  268 

Voucher  Register,  Illustrated 218 

Voucher  System 215-217     266-269 

Wright's  Rules  for  Finding  Trial  Balance  Errors 54  49 


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